2008 Paper Recycling Supplement - Under Consumption

The United States has long been known as a nation of consumers. However, the recent economic downturn has many Americans rethinking how and what they buy. According to statistics released by the U.S. Commerce Department in September, retail sales fell 0.3 percent in August, with sales falling in categories from electronics to gasoline.

Domestic consumption of recycled paper also has been declining. The export market remains hungry for the world’s recovered fiber; however, industry consolidation and a slow manufacturing sector paint a very different picture for the consumption of recovered paper stateside.

Summer traditionally brings downtime to U.S. paper plants as production slows with the seasonal ebb and flow of business. However, recent mill closures and production shifts have outgrown the typical seasonal slowdown. Mills continue to close down entirely or shut production on machines indefinitely. In early September, International Paper (IP), based in Memphis, announced plans for an indefinite shutdown of its No. 3 paper machine at the company’s Valliant, Okla., mill. The machine, which produces approximately 430,000 tons of containerboard per year, is scheduled to shut down as of Nov. 1.

Prior to the shutdown of Valliant No. 3, International Paper’s North American containerboard production stood at roughly 11.5 million tons per year.

Mill closures and consolidation seem to be part of an overall trend of shrinking processing capacity and consumption in the United States. (See "Consolidated Containerboard," page S26.)

According to the July 2008 Recycled Paper Monthly report published by the American Forest & Paper Association (AF&PA), Washington, consumption has declined. According to the report, total U.S. industry consumption of recycled paper was 2.830 million tons, a 4.7 percent decrease from July 2007. The monthly statistics point to a sharp decline; however, year to date, consumption has only seen a 1.2 percent decline relative to last year.

Consumption trends varied by grade, but almost all experienced some decline in July compared to the same month a year ago. Old corrugated containers decreased 4.8 percent, news fell 10 percent, pulp substitutes fell 9.9 percent and high-grade deinking paper declined 4.7 percent. Consumption of mixed paper, on the other hand, increased 3 percent, according to the AF&PA’s findings.

A decline in consuming trends is reflected in production figures as well, though some products have seen production increases recently. Total production decreased by 2.2 percent in July 2008 compared to July 2007, according to the AF&PA. Total production fell by 69,300 tons compared to July 2007. However, production was up 7.7 percent when compared to June 2008.

Linerboard production fell 5 percent compared to July 2007, but rose 6.2 percent compared to June 2008. Linerboard export production increased 18.9 percent in comparison to last month and rose 10.7 percent when compared to July 2007.

Containerboard mill inventories posted a drop-off in July 2008. Linerboard inventories were 221,740 tons, down from 245,805 tons in June 2008.

More information on consumption trends is available on AF&PA’s Web site at www.afandpa.org.

The author is associate editor of Recycling Today and can be contacted at jgubeno@gie.net.