<B>Paper Stock Use Continues Decline</B>

The slowing economy has been hammering the forest products industry significantly over the past several months. With slowing demand for finished product, many mills opted to take machines or even whole mills off line to remove excess capacity from the market.

The strategy by many paper companies to take inventory correction downtime has caused a slowing in demand for recovered fiber as a raw material. Over the second half of last year the consumption of recovered fiber at domestic mills has been slowing.

The most recent figures from the American Forest and Paper Association magnify the problem. Total consumption of recovered fiber by domestic mills stands at 3.086 million tons for November, pushing the 11-month total to 32.689 million tons. The figure is down a sharp 5.2 percent from figures the same time last year.

Although the total figure is a disappointment, the figure for last November is up sharply from the previous November’s figure.

While the AFPA is reporting slowing demand for recovered fiber, the association also is showing that the inventory of recovered fiber at mills also is climbing. This may indicate further inventory adjustments may be taken through the first quarter of this year. At the end of November the inventory level stands at 1.058 million tons, a 3 percent increase from the previous month, as well as up 6 percent from figures the same time last year.