Paper Recycling Conference: Buying in a Seller’s Market

Outside observers who are tempted to think of the paper industry as static have probably not spent much time with recyclers or recovered fiber mill buyers.

In a panel discussion held at Recycling Today’s June 2007 Paper Recycling Conference, a group of recyclers and mill buyers discussed a volatile and competitive global market.

Among the challenges facing both groups is sourcing un-shredded office paper. Panelist Al Metauro of Metro Waste Paper Recovery Inc., Toronto, noted that the shredded paper is now more widely used by mills than it was as few years ago.

Fellow panelist Tim Hays of United Paper Stock, Pawtucket, R.I., agreed that the market has adjusted to using more shredded paper, but add, “There’s a tremendous amount of unnecessary shredding taking place today.”

A barrier to collecting more office paper can simply be the reluctance of office building managers to have to contend with another truck at the loading dock. “Dock workers don’t want to do it,” noted Mick Barry of Mid-America Recycling, Des Moines, Iowa.

The very shape of tall office buildings can also be a problem, remarked Alan Stein of Gulf Coast Recycling, Houston. “Tall buildings weren’t built to handle scrap paper [collection],” he commented. Additionally, solid waste companies have the most influence at the loading dock level, and “the problem with solid waste companies is that they make their money at the landfill,” noted Stein.

Metauro, however, believes a renewed interest in environmentalism could be helping. “I think the building owners want to become more green,” he commented. He also acknowledged, though, that a disposal mentality reigns among janitors and building staff.

Hays expects recovered fiber supply overall to present a challenge in the near future. He noted that manufacturing has been leaving the Northeast “since 1920.”

Hays, Stein and Metauro all expressed concerns about the decline of paper manufacturing in North America and the prospects of Chinese papermaking reaching overcapacity. “When new paper mill [construction in China] stops, what happens?” asked Stein.

Panelist Erik Deadwyler of Rock-Tenn Co., Norcross, Ga., said that as mill operators, “Our biggest risk is raw material costs,” referring to both natural gas and recovered fiber.

Barry raised the prospect of recovered fiber being targeted as an alternative energy feedstock, presenting yet another challenge for the paper industry. He said recovered fiber “is a biofuel waiting to happen. You’re going to see low-grade paper have a value as fuel,” Barry predicted.

Recycling Today’s Plastics Recycling Conference was held in coordination with the Paper Recycling Conference and Electronics Recycling Conference at the Peabody Orlando in Florida June 10-12.