Paper

Summer ended on a high note for the recovered fiber market, with prices for main grades holding steady at favorably high rates for yet another month.

Seasonal trends tend to bring a dip in prices in late summer and early autumn, as back-to-school schedules and a return to full-time work usually bring about a sharp increase in generation and supply, particularly for packaging grades like old corrugated containers (OCC).

But recyclers and packers were pleased to see prices hold at their high summer levels at the beginning of September. "Markets are good—the same. It’s nice to have a month with no change," says one Midwestern recycler. "News, OCC and SOP (sorted office paper) are all moving well—everybody wants it."

Recyclers and packers are on the watch for a seasonal dip like the market saw last fall; but, reflecting on 2007 so far as a whole, paper recyclers admit they have little to complain about heading into the fourth and final quarter of the year.

It’s been a "good, solid year" so far, especially for OCC, says an Illinois-based recycler. "We had a good, solid year where cardboard was in demand and moved well—a year of good business conditions."

In a market that is usually full of peaks and valleys throughout the year, he says 2007 so far has seen few valleys. "The worst we had were good markets," he said. "It’s like my grandmother used to describe her cooking—sometimes it was good and sometimes it was even better."

High prices have some inside the industry wondering if $100-plus for OCC is going to become the norm in the business. "My question is, have we set a new standard?" asks one Southwestern recycler. The ever-present fear, he says, is the possible fallout from such inflated rates. "There’s always a fear that prices will drop," he says. "All you need is a couple of mills to say ‘we’re full,’ or to see manufacturing have a downturn, then the mills will be full of paper. It’s an old axiom, ‘the higher it goes, the steeper it falls.’"

Many sources credit consistent demand on the export scene, particularly from China, as a major driver keeping demand high and prices strong, even during historically slow periods. "That’s the main change from the year before—we’ve seen more increased demand from China because they’ve been adding new, modern, high-volume paper machines and looking to the U.S. for fiber furnish," says one California recycler.

While China continues to be the big influence, it’s not alone on the export front. Sources cite India as a growing influence as a consumer of recovered fiber. Korea, Indonesia, Thailand and Mexico are also consistently present on the export scene.

When it comes to accessing the lucrative export market, California’s ports are facing further legislative action, which has caused some concern for paper recyclers and brokers on the West Coast, according to a California recycler. On top of dealing with the PierPass program, which is designed to help ease traffic during peak hours at the ports of Los Angeles and Long Beach, the state recently faced a proposed container fee. According to a Sept. 5 report in the Long Beach Press Telegram (Long Beach, Calif.), SB 974 would have collected a $30 fee on each 20-foot equivalent container moving through the ports of Long Beach, Los Angeles and Oakland. According to the report, the bill was tabled following a meeting between Gov. Arnold Schwarzenegger and the bill’s author, state Sen. Alan Lowenthal, D-Long Beach. The fee would have funded air quality improvements and upgrades to the state’s infrastructure. According to the report, Lowenthal and Schwarzenegger intend to work together to draft a final version of the bill. Large retailers, along with paper exporters, are opposed to the proposed fee.

(Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)

Registration is now open for the fall meeting of the Paper Stock Industries Chapter of ISRI (Institute for Scrap Recycling Industries).

The chapter’s 46th Annual Fall Conference will be Nov. 14-16 at the Hyatt Regency-Gainey Ranch in Scottsdale, Ariz.

Online registration is now available at www.paperstockindustries.org. A print brochure for the event is also available.

More information is available at PSI’s online home at www.paperstockindustries.org.

New research by the U.K.-based Waste & Resources Action Programme Recycled Paper Advocacy Team shows that print and paper buyers are planning to significantly increase their use of recycled paper during the next five years.

According to the research, of those responsible for print and paper procurement for major organizations in the U.K., more than 67 percent plan to increase the proportion of paper products using recycled content in the future.

Of these, 51 percent plan to increase their use by up to 20 percent in the next 12 months; a quarter plan to increase their procurement by between 20 to 50 percent; and the remainder by between 50 and 100 percent.

Longer term, 35 percent plan to increase their use of recycled stock by between 50 to 100 percent in the next two to five years. An additional 35 percent plan to increase their use of recycled paper by 20 to 50 percent.

The report also notes that of those surveyed, 52 percent expect the overall industry to increase its use by between 20 to 50 percent. Ten percent predict an increase by as much as 50 to 75 percent; and 36 percent forecast an increase of up to 20 percent.

The recent paper price increases on virgin products have encouraged 16 percent of organizations to use more recycled paper.

Catalyst Paper Corp., headquartered in Vancouver, British Columbia, has decided to withdraw its earlier proposed private placement strategy to sell $200 million in aggregate principal of senior notes. The company cited adverse market conditions for pulling back from the program.

Catalyst has five mills with a combined capacity of 2.4 million metric tons. The company produces mechanical printing paper and kraft pulp and operates what it claims is the largest paper recycling facility in Western Canada.