The domestic market for recovered fiber continues to languish. The same can not be said for the export market for recovered fiber. Over the past several months strong orders for a host of recovered fiber have helped boost the overall market for recovered fiber.
The most recent figures from the U.S. Commerce Department reflect this trend. For May, the most recently reported month, paper stock exports reached 1.038 million tons, pushing the figure for the first five months up 24 percent from figures the same time last year. On an annual rate, year to date, paper stock exports stand at 13.815 million tons.
The strength in paper stock exports has been driven primarily by the surging interest in shipments to China. Over the past 12 months, as North American production capacity has closed, new capacity in Asia, especially China, has helped boost the overall market for recovered fiber.
While shipments to China have been the biggest plus for the export market, shipments to Canada, the largest trading partner for the United States posted some strong improvements. For May, shipments of recovered fiber from the United States to Canada stand at 210,058 tons, boosting the five-month export total up 13 percent from figures the same time last year.
While the strong demand has helped propel exports, another factor that is benefiting U.S. paper stock exporters has been the weakening U.S. dollar. Over the past several months, as the U.S. currency has declined against other world currencies, the cost of purchasing goods and services from the U.S. have improved. This has led to greater interest in many commodities, including recovered fiber.
With the U.S. currency still in a favorable position the demand for recovered fiber to sources outside the United States should continue at their brisk pace, offsetting any continued slowing in the domestic use of recovered fiber from U.S. paper and paperboard mills.