A POSITIVE OUTLOOK
The scrap paper market witnessed another stable month in March, helping create a positive outlook for the beginning of the second quarter of 2005.
While most grades have had a relatively strong month, office paper may be showing some signs of weakness. Sources from all regions say the market has slowed considerably and prices have dropped. Some speculate that the growing interest in secure document destruction has created an influx of supply in high grades, especially office grades, and demand is slow in catching up. But despite the drop in price, many remain optimistic that the market is likely to level out rather than to continue downward.
As expected, prices for old corrugated containers (OCC) have come back down in the Northeast after an unexpected hike in the asking price last month. While the market is reportedly a little soft in the Northeast, OCC has remained stable in generation and in price in most other regions.
The old newspapers (ONP) grade has inched up in price slightly, with No. 8 and No. 9 news standing out. The only exception is No. 6 news, which has reportedly dropped a bit in price in the New England area. Generation has been stable and even a little stronger than usual for this time of year in some areas, especially out west. Sources say this could be attributed to the typically larger newspapers that are printed following the thinner winter issues and general improvement in the U.S. economy as a whole.
Pulp substitutes have been in short supply and high demand, driving the prices up. Mixed paper has also seen an upturn in price.
The eyes of the industry are again on China, and many sources say that what China decides to do will set the prices for the upcoming quarter. Brokers and pulp producers in the western United States report just now feeling the effects of China cutting back orders slightly in January and February. Domestic demand for ONP and OCC has been strong enough to keep them from feeling the effects on those grades, but sources say prices could drop for other high grades in addition to office paper, which is already down. Slight inventories are building out west, but domestic mills have been picking up some of the slack from China’s demand. In spite of any cutbacks, China still remains the strongest buyer of OCC globally.
Weather was a concern, especially in California, which was pounded by unusually heavy rain for much of February. However, the inclement weather has had a minimal effect on scrap paper generation and transportation—material has reportedly been moving steadily out west and into export markets in spite of the bad weather. Sources in other regions typically hampered by winter weather say the scrap paper markets will benefit from the confidence that comes traditionally with spring.
Despite a few frayed nerves about what’s going to happen with orders from China, sources say they are mostly optimistic about scrap paper heading into the second quarter and projecting a strong market based on the strength of manufacturing and transportation. (Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)
BESICORP–EMPIRE PARTNERS WITH WEYERHAEUSER
Besicorp-Empire Newsprint LLC has engaged Weyerhaeuser Corp. to supply its proposed recycled newsprint mill with 100 percent of the fiber required to operate the facility. Plans call for the mill to be built in Rensselaer, N.Y.
According to Besicorp, the company expects to use more than 400,000 tons per year of recyclable material. The old newspapers and old magazines will be collected from municipalities and recycling centers primarily in the Northeast.
The project received state permits to construct and operate the facility this past September and recently announced the selection of HSH Nordbank as lead arranger for the senior debt. Construction on the project is expected to begin this summer with the mill fully operational in the summer of 2007.
DS SMITH SIGNS AGREEMENT WITH BPB
London-based DS Smith PLC has announced that its St. Regis Paper division in Berkshire, England, has entered into a long-term agreement with BPB PLC, a producer of plasterboard, to supply plasterboard liner paper.
Under the agreement, sales of plasterboard liner paper to BPB will grow to an annual rate of about 100,000 metric tons.
The St. Regis division also announced a £30 million capital expenditure program to upgrade existing machines at its mills at Kemsley in Kent and Wansbrough in Somerset over the next two years. Following the investment, St Regis’ total output will increase to approximately 1.1 million metric tons of paper, 90 percent of which will be made from recycled recovered paper.
Association Announces Paper Recycling Industry Day
The Georgia Recycling Coalition’s Paper Council and the Georgia Department of Community Affairs is holding a Paper Recycling Industry Day April 20th in Dublin, Ga. Attendees can chose from the morning or afternoon session.
The purpose of the one-day event is to help the paper and recycling industry in Georgia create solutions to paper recycling challenges in local communities.
The program’s organizers say that the paper industry in Georgia is one of the largest employers in the state and that the event will help local and state elected officials, as well as recycling program managers, association representatives and the media, to better understand many of the dynamics that affect the paper and paper recycling industries.
The purpose of the event, according to its organizers, is for the paper recycling industry to reach out to communities to create a stronger infrastructure for quality paper recovery.
The program will include a presentation about the paper recycling industry’s impact on Georgia, as well as a tour of the SP Newsprint mill in Dublin, Ga.
The association plans to make the Paper Recycling Industry Day an annual event.
Additional information on the program is available from the Georgia Recycling Coalition at (404) 634-3095 or via e-mail at garecycles@mindspring.com.
GEORGIA PACIFIC APPLIES FOR PERMIT CHANGES
The Georgia-Pacific Corp., headquartered in Atlanta, has applied for changes to its air emissions permit. The changes would allow the company to burn construction and demolition debris for fuel using a new biomass boiler at its Old Town, Maine, paper mill, according to a report in the Bangor Daily News (Bangor, Maine).
The company has two applications being processed by the state Department of Environmental Protection (DEP).
The first application would change the backup boiler from the mill’s oil boiler to a new biomass boiler, which was purchased last year from Montreal-based company Boralex, according to the report.
The second application under review by the Maine DEP seeks permission to use C&D material to fuel the biomass boiler.
Georgia-Pacific has submitted these applications to the Maine DEP, which is accepting written comments on the modifications, according to the report in the Bangor Daily News.
NEENAH PAPER TO CLOSE PULP MILL
Neenah Paper, based in Alpharetta, Ga., has announced its intention to close the smaller of its two pulp mills at its Terrace Bay, Ontario, pulp operation in the second quarter of 2005.
The No. 1 mill, originally built in 1948, has an annual capacity of about 125,000 metric tons of pulp.
"This is a difficult but necessary step if the Terrace Bay facility and the associated woodlands operations are going to be viable," Sean Erwin, CEO of Neenah Paper, says. "Terrace Bay and its woodlands have been identified as one of the highest cost pulp operations in Canada. The smaller scale of the No. 1 mill did not justify the investment necessary to compete successfully in today’s global pulp market," he adds.
Explore the April 2005 Issue
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