The paper recycling industry saw a severe interruption in the second half of 2008 to what had been an enjoyable run of robust demand and healthy material generation.
Panelists at a session at Recycling Today’s Paper Recycling Conference in Atlanta provided an overview of recent market conditions in three major recycled paper sectors and their views on factors affecting the current market.
At the “Across the Grades” session, moderator Bill Moore of Moore & Associates, Atlanta, looked at 10-to-12-year trends in recovered fiber markets to show how OCC (old corrugated containers), ONP (old newspapers) and especially mixed paper are all exported from the United States more than they used to be.
In 2008, some 63 percent of mixed paper was exported and 36 percent of ONP. That compares to 24 percent of mixed paper and 14 percent of ONP just 11 years earlier in 1997. The export markets, said Moore, have helped recyclers find outlets for the additional tonnage that has been collected in the United States (although collection peaked, at least temporarily, in 2007).
Newsprint makers have faced a declining market recently, acknowledged Robert Cook of AbitibiBowater, Montreal. “We’re now seeing double-digit declines in newsprint usage,” Cook said of the recent North American market, where many newspapers have lost readership, reduced their page size and printed fewer pages on average.
For recyclers, this same factor hurts their supply lines as programs collect less pure ONP and often try to make up the tonnage by collecting magazines, mixed paper and boxboard.
In the high grades markets, John Daniel of Federal International Inc., St. Louis, noted that tissue mills remain a healthy market for the consumption of these grades.
New tissue mills remain among the few new paper mills being built in North America, and even in the current slump tissue production is down just 1.9 percent in early 2009 compared to one year ago. On the supply side, however, “Overall, the use of printing and writing papers has been declining in the United States for the past five years,” said Daniel.
Help on the supply side comes from an active document shredding industry, which is collecting, shredding and recycling streams of printing and writing paper that are sometimes years or even decades old.
Packaging grades have been in demand from China throughout this decade, while domestic consumption in the United States may have peaked in the late 1990s, according to Erik Deadwyler of RockTenn Co., Norcross, Ga. Since that peak, domestic demand has declined by 12 percent, said Deadwyler.
Predicting what will happen with OCC next is as uncertain as forecasting for the overall economy, said Deadwyler. “Once you figure out what’s going on in the global economy, you can figure out what’s going on in the containerboard industry,” he stated.
Recycling Today’s Paper, Plastics and Electronics Conferences were held June 7-9 at the Hyatt Regency Atlanta in that city’s downtown.