From The Paper Stock Report
A
new study of mill procurement officials reveals that 75 percent of them
do not buy recovered paper from mixed waste processing centers. The
survey was conducted by the Institute of Scrap Recycling Industries
(ISRI).
ISRI released preliminary results of a survey of North
American paper mill buyers about their thoughts and experiences with
materials from mixed waste processing centers. Mixed waste processing
centers advise their residential customers that there is no need to
separate recyclables from solid waste (including organics) prior to
collection, claiming that the valuable recyclables will be successfully
separated in a Material Recovery Facility (MRF), ISRI said.
Although
there have been other recent studies about mixed waste processing
centers, this is the first known study that exclusively solicited views
of recovered paper buyers regarding their opinions and views about the
ability to successfully use the recyclables sorted from such “one-bin”
programs.
“We gained an incredible amount of learning from the
survey participants regarding their experiences and preferences
concerning the procurement of recovered fiber for their paper mills,”
said Robin Wiener, president of ISRI. “In 2014, ISRI issued a policy
statement discouraging the use of one-bin collection systems due to
anecdotal statements and strong feelings from our member companies
regarding the degradation in quality of recyclables recovered from such
systems, but it wasn’t until the completion of this survey that we
finally gleaned hard data from paper mills about the poor quality and
contamination that they are actually experiencing, and the resulting
impact on their purchasing and sourcing decisions. It is clear from this
study that in communities where mixed-waste processing systems are put
in place, the recycling of paper is significantly diminished, both in
quality and quantity.”
Some highlights of the survey’s initial results include:
- 82 percent of respondents purchase recovered fiber for between one and
six mills, and 49 percent of respondents purchase material in the range
of more than 100,000 tons of recovered fiber per year, but less than
500,000 tons of recovered fiber per year.
- Of the respondents, 25
percent purchase “some” material from dirty MRFs, but these mills
purchase less than 10 percent of their required tonnage from mixed waste
processing centers.
- Of those that purchase recovered fiber from
mixed waste processing centers, 70 percent find the quality to be worse
than most other recovered paper, and 90 percent of those mill buyers
have had to downgrade or reject the paper from the mixed waste
processing centers at a higher rate than recovered paper from “regular”
MRFs.
- Almost two-thirds of those surveyed feel that ISRI guidelines should contain a statement as part of its recovered paper
specifications that states: “Paper recovered from one-bin programs,
separated in mixed-waste processing centers, is not fit for use in USA
paper mills.”
Of the 75 percent of respondents who do not
purchase recovered fiber from mixed waste processing centers, the top
eight reasons given, for not purchasing it, were as follows:
1) Contamination;
2) Odor;
3) Low Quality;
4) Exhibit a higher level of prohibitives and outthrows versus what is acceptable;
5) Internal quality standards prevent purchasing;
6) Too risky;
7) Excessive moisture; and
8) Quality will not meet the mills’ customers’ needs.
The
survey was conducted confidentially via an online survey to North
American paper mill buyers between January 11 and January 31, 2016. An
independent, third-party research firm was utilized to conduct the
survey. In order to achieve a high response rate, the survey was limited
to less than 10 critical questions. All major mill groups using
recovered paper in North America were invited to participate in the
survey, both members, as well as non-members of ISRI.
ISRI is a
trade association that represents more than 1,600 companies in 21
chapters nationwide that process, broker and industrially consume scrap
commodities, including metals, paper, plastics, glass, rubber,
electronics and textiles.
By Ken McEntee
The Paper Stock Report
In the wake of the Chinese Lunar New Year break, U.S. exporters reported generally unexpected mid-February boosts in prices of bulk grades going to that market. Old newspaper (ONP) and mixed paper, they reported, had the largest increases, but old corrugated (OCC) prices also improved. However, traders reported, it was too soon to determine whether the hikes would hold for any length of time, and whether they would have an impact on domestic mill prices.
Various exporters reported that ONP prices delivered to China jumped by $7 to $15 during the week of February 22, relative to the beginning of the month, with some sellers asking for even more. Mixed paper prices delivered to China, traders confirmed, were about around $6 to $8 per ton higher, with one broker reporting offers for an additional $8 above that. OCC delivered prices to China jumped by $5 to $7 per ton, with offers reportedly extending as much as $5 per ton higher.
Before Chinese New Year, typical OCC prices from the U.S. West Coast delivered to China’s main ports reportedly topped out at around US$163-166 per ton. By mid-February, prices were discussed between $169 and $175 per ton. Mixed paper in mid-February was being offered to mills at US$120 delivered to China – up from around $105, while ONP was being offered at $132 – up from as low as $115.
Some traders said they were mildly surprised by the post-New Year increases, noting that some Chinese mill buyers let inventories slip during January. Others, however, said the increased bewildered them.
“I’m happy that the prices are up. We need better prices to support the MRFs, but I don’t understand what could have happened during the first two weeks of February,” said an exporter in the Pacific Northwest. “Why are they deciding they need to pay more money for paper? There is hardly a domestic market for news and mixed, and the Chinese buyers could have had all they wanted without raising prices. It all seems to have been driven by the Chinese mills’ buying agents – America Chung Nam and Ralison International - who are here in the states.”
According to an exporter in California, “The big newsprint mill in China really flaked out and didn’t want to buy anything earlier, and now they’re running low on inventory. Production there has been unstable, so demand for fiber has been streaky. If mills were more consistent in their buying, nobody would have to get into a panic.”
Some traders expressed optimism that OCC prices will begin to trickle upward throughout 2016. In February, however, North American mill inventories were reportedly full during a seasonally slow production period and mills were far from desperate for additional loads.
The consensus among U.S. traders is that it’s too soon to tell whether the price increases are a temporary adjustment, or whether they will hold for a month or two. They also are waiting to see how domestic prices might be impacted in the weeks to come. Generally, most traders said they anticipated only nominal reverberations on domestic ONP and mixed paper prices because those grades have become primarily export commodities. In particular, almost 75% of all ONP generated in the U.S. last year was exported.
"Domestic consumers will have to bring their prices up, but that's a small portion of the news market," said a broker in the Southeast. "These prices basically just bring the market up to where it was a few months ago."
According to a West Coast broker, “Mills in China are still struggling financially. But prices had been dropping for the last six or seven months slowly. Now it may have hit the bottom and may slowly climb up. I think orders now in the market justify better prices for at least two months. We have orders, other people have orders and we’re all trying to outbid each other right now trying to get the tons.”
Some traders expressed optimism that OCC prices may begin to trickle upward throughout 2016. In February, however, North American mill inventories were reportedly full during a seasonally slow production period and mills were far from desperate for additional loads.
“I think we might see the North American mills coming up to meet the export OCC price, but I don’t think the domestic market is even much of a factor any more for news and mixed paper, especially here on the West Coast,” one broker said.
According to another broker, “Domestic mills in the south are really full, but not so full that we are finding people willing to sell us OCC to export at a price less than the domestic price. So they are still taking loads. For this time of year, though, there is a good supply of OCC being generated. Maybe that is a good statement for our economy.”
OCC, said another broker, “is starting to show a little bit of strength export wise. A lot of people say it won’t continue, but they always say that. They just don’t want it to continue.”
Domestically, traders reported, office paper may be the strongest grade of the first two months of the year.
“Office paper is getting strong on the export market and it’s carrying over to the domestic mills as well,” one broker reported. “China is showing more interest, Mexico wants more and the U.S. and Canadian mills are pulling from a larger supply radius than usual. Meanwhile this is a slim generation period. In my opinion, office paper has been artificially lower than its true fiber value for quite a while, so it’s good that is starting to show some strength.”
FutureMark Paper Group, North America’s leading provider of responsibly made, high-recycled paper, grew its customer base for a third straight year in 2012 with the addition of respected organizations such as the American Museum of Natural History, Black & Decker, Kaplan, Kohl’s, Sam’s Club, Time Inc., Trader Joe’s and Wiley, FutureMark announced. FutureMark also significantly expanded relationships with existing customers Chick-fil-A, National Geographic and Whole Foods Market.
Kohl’s, Sam’s Club and Trader Joe’s are among the corporate leaders moving to recycled paper, helping FutureMark conserve more than 4 million trees in 2012, the company said. Eco-friendly recycled paper helped FutureMark expand and grow for a third straight year, despite continued contracting demand for printing paper in North America.
“FutureMark Paper Group continues to expand and grow, despite tough conditions overall in the North American market for printing paper,” said Steve Silver, president and CEO. “Our commitment to minimizing the environmental impact of paper production is really paying off.
Customers value our products’ high recycled content and environmental profile. They especially seem to like that our recycled paper performs and costs the same as less green, non-recycled alternatives.”
FutureMark Paper Group’s responsibly made printing and packaging papers have the highest recycled content for products of their type made in North America. The group’s two manufacturing facilities produce 90- to 100-percent recycled papers used in books, catalogs, magazines, retail inserts, office papers, labels and promotional mailings, as well as in fast food and commercial packaging applications.
FutureMark Paper Group’s production centers are located in Michigan’s Upper Peninsula and in the Chicago metropolitan area. For more information, visit www.FutureMarkPaper.com.
