Paper

LEANER APPETITE

The domestic consumption of recovered fiber declined over the first two months as mills continue to tighten inventories and produce less material.

According to recent figures from the American Forest and Paper Association, Washington, consumption for February came in at 2.594 million tons, a steep drop from last February’s consumption total of 2.945 million tons. The decline for the month made for a two-month total of 5.435 million tons, a 2.4 percent decline from figures from the same time last year.

The large decline can be partly traced to continued shutdowns at a host of machines throughout the U.S. As paper and paperboard companies grapple with sluggish demands, the consumption of recovered fiber continues to slip.

The amount of downtime has been significant over the past several months. While much of the shutdowns have involved paperboard and newsprint operations, a number of tissue operations have announced plans to take extended downtime at their operations. In early April Cascades Inc. announced it would be taking extended downtime at its Mechanicville, N.Y., tissue mill, further reducing material flow to domestic sources.

Along with the decline in consumption, the inventory of recovered fiber at domestic mills declined in comparison to figures during the same time in 2002. According to the AFPA, at the end of February, the inventory of recovered fiber stands at 1.021 million tons, a 9.2 percent drop from inventory levels the previous month, and a 1.4 percent drop from the same time last year.

This swing, however, is causing some problems. The strong growth in offshore shipments of recovered fiber comes while container availability is suspect, resulting in higher transportation costs to ship material offshore.

Regardless of the problems with domestic mills, prices for a host of recovered fiber grades, especially old corrugated containers (OCC), are moving up. As Chinese mills continue to play an active role in securing greater blocks of material, many domestic mills are raising purchase prices to guarantee an adequate amount of material.

Also, a number of paperboard mills have announced price hikes for their finished product. In defending these higher prices, many of these paper companies attribute the need for higher prices to the sharply higher raw material prices (such as for OCC) they are having to pay.

While domestic mill difficulties put pressure on the paper stock industry, the continued saving grace for the industry has been the growth in exports. Over the past several months shipments to Asia, primarily China, have led to better pricing and to pressure on domestic mills to raise their prices for recovered fiber. A steep 28 percent jump in exports, many shippers feel, will likely hold up for the next several months as several Chinese mills seek additional tonnage.(Additional news on paper markets, including breaking news and pricing, is available at www.RecyclingToday.com.)

MILL BUYER AWARD CREATED

The Recycling Today Media Group, in coordination with its Paper Recycling Conference & Trade Show, will be presenting a "Buyer of the Year" award to a selected mill buyer of recovered paper.

The award’s criteria, nomination process and judging are being conducted by the Recycling Today Media Group, Cleveland, and paper and recycling industry consulting firm Moore & Associates, Atlanta.

Eligible nominees should be in recovered paper purchasing positions for a mill or group of mills in North America.

According to Bill Moore, president of Moore & Associates, nominees will be judged based on four criteria:

Marketplace Feedback – Candid input from the supply
community on their view of a buyer’s procurement tech-
niques and methods.

Job Performance/Market Acuity – A technical analysis of
a buyer’s performance, including price performance,
quality considerations and supply continuity.

Communications Skills – How well a person gives feed
back to his or her suppliers on items such as rejects and
downgrades, short and long-range fiber needs and trans
portation issues.

Professionalism – How the person is viewed by the
industry on his or her ethics and reputation.

Nomination forms for the "Buyer of the Year" have appeared in previous editions of Recycling Today magazine (including the March 2003 issue, on page 117) and is available online at the Recycling Today Web site, www.RecyclingToday.com.

The winner of the 2003 "Buyer of the Year" award will be announced and honored at the 2003 Paper Recycling Conference and Trade Show, to be held June 22-24 at the Hyatt Regency hotel in downtown Chicago.

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