Paper Department

North American consumers of scrap paper may finally be entering a phase of increased demand.

A positive indicator of such a development came in the form of March summary statistics released by the Fibre Box Association, Rolling Meadows, Ill. The shipment of corrugated products shot up by 7.1 percent for March compared with figures from the same time last year. For the month, shipments checked in at 33.49 billion square feet.

The Western region of the U.S., which saw shipments of corrugated products climb by 10 percent, lead the way.

All regions of the country showed strong improvements for the month, though. The Northeast realized a 7.2 percent improvement; the Southeast was up 6.7 percent; orders in the North Central region were up 6.6 percent; the East Central region posted a 6.2 percent gain; and the South Central U.S. was up 5.8 percent.

 In the first quarter, shipments also posted an improvement at 95.11 billion square feet, a 3.3 percent increase from figures for the same time last year. The Western U.S. showed the strongest improvement with an increase of 5 percent.

March consumption stands at 2.56 million tons, a 6.7 percent improvement from last year’s figure. For the first quarter, containerboard consumption increased by 3.8 percent to 7.34 million tons.

 Meanwhile, inventory levels at containerboard plants at the end of March dropped by 5.3 percent from February. The supply on hand also declined for the month to 3.8 weeks compared to February’s 3.9 weeks.

The additional activity seems to be having the expected affect on pricing, with trends up across the board for scrap paper, pulp, finished paper and paper products.

Cascades Inc., Kingsey Falls, Quebec, has announced the acquisition of a tissue mill located in Memphis, Tenn. The idled assets purchased include a paper machine, converting lines and a de-inking pulp mill.

The de-inking pulp mill was previously owned or operated by American Tissue. The tissue paper machine and converting lines were previously owned by a trustee on behalf of GE Commercial & Industrial Finance.

The acquisition will increase Cascades’ tissue capacity by approximately 40,000 short tons per year. The start-up of the tissue machine will be dictated by market demand, the company has indicated. The converting lines, which are expected to start-up gradually later in 2004, will produce bathroom tissue and paper napkins.

"This new acquisition represents a great opportunity for us to secure good assets at a fair price," says Suzanne Blanchet, president and CEO of Cascades’ Tissue Group. "But more importantly, it is in line with our current development strategy. This investment of approximately $11.5 million will enhance our presence in the Southern U.S., further strengthening our ability to serve North American customers coast to coast in the retail as well as the commercial and industrial markets."

A multi-client report prepared by Moore & Associates, Atlanta, offers a forecast for old corrugated containers (OCC) prices between now and 2008.

The Fore$ight report looks at industry fundamentals affecting the supply of and the demand for the bellwether paperstock grade domestically and overseas.

In terms of factors that will push prices upward, demand from China’s new board mills will keep OCC prices at a healthy level. The key question is: How high will China drive the price of OCC?

"Asian demand for U.S. recovered paper (particularly OCC) has been growing rapidly and will continue," writes Moore.

Moore will moderate the keynote session at the Paper Recycling Conference & Trade Show in Atlanta June 27-29. Moore & Associates will also exhibit at the trade show.

More details on the Fore$ight report and ordering information can be found online at www.MARecycle.com.  Moore & Associates reports are also available at Recycling Today’s online store at www.RecyclingToday.com.