Last year ended with lots of uncertainty surrounding recovered paper markets, particularly as old corrugated containers (OCC) pricing and box demand plummeted.
The conditions didn’t leave recyclers with much optimism at the time, but as 2023 draws to a close, there is more optimism—and lots of room for growth, particularly when it comes to recovery.
Sentiments at the Paper & Plastics Recycling Conference (PPRC) in Chicago this October shifted slightly from the doom and gloom of the 2022 event, where there was talk of “dying” grades like sorted office paper and an “artificial ramp-up” in demand from the COVID-19 pandemic that brought on difficult market conditions, to a renewed focus on supplying the nearly 5 million tons of capacity that have come online over the last several years.
“We’ve kind of taken the whole industry, thrown it up in the air and shuffled the deck,” John Grinnell, vice president and general manager at Delaware, Ohio-based Greif Inc., said during a session at PPRC. (Read more from Grinnell in “Where do we go from here?” starting on Page S10.)
The market hasn’t made a full recovery and supply remains a concern; however, this year’s high-profile mill startups as well as companies’ optimization strategies have changed the playing field.
Fort Mill, South Carolina-based Domtar kicked off the year with the opening of its $350 million recycled paper mill in January—the company’s first 100 percent-recycled mill—which is projected to produce about 600,000 tons of linerboard and corrugated medium annually. Cascades Inc., Kingsey Falls, Quebec, followed in May with the opening of its Bear Island recycled containerboard mill in Ashland, Virginia, while Conyers, Georgia-based Pratt opened its $700 million recycled paper mill and box plant in Henderson, Kentucky, in September, marking the company’s sixth recycled paper mill in the U.S.
Of course, the question remains, if supply still is a concern, where will all these facilities source the feedstock needed to maintain operations?
For Shawn Logan, director of commodity sales at Houston-based WM Recycling Services, the answer is in the material already flowing through recycling facilities. “You don’t have to go out and get new accounts to then get some new OCC—it’s already there,” he said. “There’s good material in [residue] that the technology thus far just hasn’t been able to capture.”
Grinnell, too, emphasized technology could set up recyclers and mill operators for success, and both men noted how much the current system could improve.
It would appear, then, that hope is on the horizon as we close the door on 2023.
But as those in the recovered paper industry know all too well, market volatility never truly goes away, and when speaking about what the future holds, Ryan Fox of Bloomberg said, “Ask anybody what’s going to happen three months from now, [and] they’re going to be wrong.”
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