OPTIMISM GROWS FOR PAPER RECYCLERS
Last year may have shaken the paperstock industry, but sentiment started to turn toward the end of 2009. Going into 2010, this cautious optimism has grown into a more bullish outlook, at least for the first part of the year, with several paper recyclers foreseeing better prices in the first quarter.
“Resilient” may be the word that best describes the current market. Prices have been firm, and movement has been good, with offshore orders helping to drive the market. Many domestic mills also are seeking to lock in orders, helping to keep prices at levels that allow recyclers to be profitable.
While the general economy is still questionable at best, some within the industry say they believe that paper and pulp markets, which previously saw declines in price and demand, have turned a corner. This could indicate strengthening markets going into 2010.
Supporting this trend, the American Forest & Paper Association (AF&PA), Washington, D.C., reports that shipments of printing and writing paper, after declining steadily throughout most of 2009, have rebounded to show growth for November, the most recently reported month. According to the AF&PA, November 2009 shipments of printing and writing paper increased by 2 percent relative to November 2008. The association notes that this is the first year-over-year increase in two years. Shipments for the first 11 months of 2009 declined 17 percent from 2008.
Several analysts say they expect to see further improvement when the December 2009 figures are released.
More welcome news was seen in the paperboard segment, which realized a modest 0.4 percent increase in production for November 2009 relative to November 2008. Production of unbleached kraft folding increased by 9.2 percent from November 2008, while recycled folding production increased 2.4 percent from November 2008, though recycled paperboard dropped by 3.6 percent from October 2009.
Despite a slip from the prior month, operating rates at recycled board mills for November 2009 stood at 89.4 percent of capacity, up from 88.3 percent in the prior month, and up 4.8 percent from November 2008.
Paperstock consumption has increased as a result. The use of recovered fiber in November stands at 2.5 million tons, a 0.9 percent increase from the previous month and a 0.8 percent increase from November 2008.
The November consumption level increase follows steep declines in the first 10 months of the year. In fact, even with the improvement in November, total paperstock use for the first 11 months of 2009 is down more than 13.5 percent compared with the first 11 months of 2008.
November 2009 consumption changes compared with November 2008 are as follows: mixed, down 1.1 percent; news, down 10.6 percent; old corrugated containers (OCC), up 4.1 percent; pulp substitutes, up 16.9 percent; and deinking grades, down 4.9 percent.
The October 2009 U.S. exports of recovered paperstock increased by 10 percent from October 2008 to 1.7 million tons. This also marks a 3.1 percent increase year-to-date.
(Additional news about paper recycling markets, including breaking news and consuming industry reports, is available at www.RecyclingToday.com.)