Commodity Report

Scrap Paper’s World Market

Security comes first for document destruction companies, but it’s been hard not to notice that the shredded scrap paper they generate has gone up in value in recent months.

Attendees of a session focused on recovered fiber pricing held at the 2007 NAID (National Association for Information Destruction) Annual Conference, April 11-13, at the Gaylord Palms Resort in Orlando, Fla., listened to several views on why paper mills are paying more for material.

Marc Forman of the Jericho, N.Y.-based Harmon Associates division of Georgia-Pacific said that when prices rise, it is invariably linked to a change in the supply and demand situation. In recent months, there has been a "relatively lackluster supply" of office paper, he said, combined with a "pretty voracious demand by mills."

Joe Jurden of Cook Paper Recycling Corp., Kansas City, Mo., also noted that the low value of the U.S. dollar against other currencies means that global buyers of scrap paper are seeking out U.S. suppliers above others.

Quality was also an important topic for the panel, including discussions of contaminants and shred size in the secure shredding market. Forman disclosed that research at his company showed that paper shredded to 1/8-inch size or smaller began to show signs of fiber degradation—and was thus less valued by mills.

David Knight of SCA Tissue North America, Neenah, Wis., noted that brown paper (such as corrugated boxes and kraft bags) commingling with office paper produces an undesirable affect at tissue mills. "You don’t want toilet paper that’s already got the brown on it before you sell it," he remarked.

Knight said his company has invested some $55 million in the last three-and-a-half years to combat such problems. "I don’t see that slowing down," he commented.

Even with such quality issues, mills are accepting shredded paper in larger amounts and are adjusting to the problems, panelists agreed. "Resistance to [shredded] paper is decreasing vs. even three years ago," said Al Villamil of Viking Fibres Inc., Bensalem, Pa.