Into the mix: driven by market demand, mixed paper is coming into its own in the recovered fiber market.

For most of the 1990s, mixed paper languished at the bottom of the scrap paper barrel as a low grade of minimal value. However, recent years have seen a serious turnaround for mixed paper. First of all, generation has increased dramatically. The American Forest and Paper Association (AF&PA), a Washington D.C.-based paper industry trade association, estimates that approximately 10.5 million tons of mixed paper were collected in 2004, according to Stan Lancey, AF&PA's chief economist.

"Typically, mixed [paper] has been an item you're just getting rid of, and now you can make money on it," says Jay Butler of Butler Paper Recycling, Suffolk, Va.

Many mills, especially those in China, have been buying it to offset the purchasing of some of the higher-end grades of old newspaper (ONP) and old corrugated cardboard (OCC). Exports of mixed paper have more than tripled since 1997, says Lancey. With export market power as its base, its value has continued to grow, and, according to some, more people are starting to rely on mixed paper as a stand-alone grade in place of high grade de-inking grades. "We're seeing more people relying on the grade of mixed paper itself and not just using it as an extender," says Jerry Hawk of Recycle America Alliance, Southeast Region, which is headquartered in Norcross, Ga.

Some mills embrace it, while others continue to shy away, but either way mixed paper has begun to make a name for itself in the recovered fiber market.

MUSCLING INTO THE MARKET. The strength of mixed paper is tied up in the strength of the economy overall, both domestically and internationally, says Tom Krughoff of Central States Fiber, Shelbyville, Ind. "There is always some steady demand for mixed paper because of its lower cost," he says.

And while domestic markets have been stable, a hungry export market has been a big part of the driving force of mixed paper's renewal.

"New, off-shore export capacity is driving demand and price increases," says Ralph Simon of SP Recycling Corp., Atlanta. "Mill start-ups in China and other Asian countries are now producing their own packaging and containerboard rather than importing the finished product from the U.S."

According to U.S. Census Bureau data, approximately 5 million tons of mixed paper were exported from the United States in 2004. Nearly 60 percent of those exports went to China, Lancey says.

Prices have been steadily rising, but most sources inside the industry don't sec prices going up too high independently of other grades. "The ceiling price for mixed paper is governed by the price of the next higher grades," says Krughoff. "If those prices rise, mixed is likely to follow. If they don't, there is no immediate pressure for mixed to go up, since there is very little price spread among these bulk grades."

Tom Lyon of Vista Fibers in Dallas agrees. "It probably won't go much higher than 75 percent of whatever corrugated is priced at."

Even as it carves out its own market share, mixed paper is still tied somewhat to the OCC market, because it still serves as a substitute for the higher grade in some cases. "Corrugated still tends to drive mixed price, for the most part," says Lyon.

QUALITY CONTROL. Because of its catchall nature, mixed paper faces a number of challenges when it conies to quality.

"Mixed paper is usually pretty reasonable, but it depends on the part of the country you're in," says Lyon. He says heavily populated urban areas are prone to having more contaminants in their mixed paper. "Everybody packs the mix differently," he says. "There are always quality issues in any grade of paper--it comes down to whatever the mill can use."

Single-stream collection has caused many quality issues when it comes to mixed paper, Simon says. "The perception is that it is a grade of mixed materials without regard to the papermaker's fiber requirements," he says. "Contamination from household garbage and trash, like glass, metal and plastic containers, has become a problem with China."

Simon says some overseas buyers perceive that exporters are dumping contaminants into China and its landfills.

"Everyone would probably agree that there has been a general decline in the quality of mixed paper in recent years due to the fact that we have been digging deeper into the waste stream to find more paper," Krughoff says. "That has the unfortunate consequence of generating more gross contaminants, such as metals, glass and garbage. Keeping the quality from deteriorating further will be a constant struggle for everyone in the industry, in the coming years."

Issues with specification and quality might be better dealt with by improving communication between suppliers and mills, Krughoff suggests. "Good mill buyers, packers and brokers can match the supply with the needs of the mills," he says. "For instance, some mills are using mixed paper as a newspaper substitute, in which case they are looking for a pack containing a lot of groundwood and not as much boxboard or office paper." He adds that other mills are using mixed paper to extend their OCC and are looking for a "harder" mix.

Many agree that current specifications like the Institute of Scrap Recycling Industries' (ISRI) "Grade Specifications in Circular PS-2004" are adequate guidelines. "The problem is that the mill buyers and export brokers are looking for tons rather than quality raw materials for their consumers," says Simon.

THE DOCUMENT DESTRUCTION FACTOR. In addition, the booming interest in the secure document destruction industry has also had an effect on the quality of mixed paper with its own set of contaminants.

"As with most grades, initially the recovery programs are pure and the grade quality is easily identified," says Simon. "Then the process toward degeneration of the programs and the quality begins." The industry is used to dealing with contaminants like food scraps and wax paper that inevitably show up in the mix when the material is drawn from food-related sources, like restaurants. But material from document destruction firms offers different challenges.

Simon says changes in handling procedures to comply with new security regulations governing health professionals and the financial sector have some firms destroying entire boxes of material without opening them first. "What was once pure shredded office paper may now contain corrugated, hospital or medical files with x-rays, EKG reports, plastic gloves, etc.," he says.

Hawk says additional quality-related problems specific to accepting material generated by the secure document destruction industry are plastics from report coversheets and transparencies ending up in the mix. However, Hawk anticipates that this problem will solve itself as more people turn to PowerPoint software for presentations.

Because of the specific contamination issues the document destruction industry brings to the mixed paper material stream, Simon suggests there could be a need for a new grade designated as "mixed office paper," which could be considered as either a high-quality mixed paper or a lower-quality de-inking grade.

LOOKING AHEAD. Hungry overseas buyers have been keeping the recovered fiber market strong for most grades, and those inside the industry expect that trend to continue. And even as its making a place for itself in the market, most sources speculate that the performance of mixed paper will continue to hinge on that of other grades.

"It's really tied to corrugated," says Lyon. "When the demand is strong for corrugated, demand will stay strong for mixed. When corrugated goes down, so does mixed."

Hawk agrees that the market definitely looks good in the short term, but long term is a little harder to predict. "It's got its area of use for now and it looks stable," he says. "But if our ways of packaging change, then everything is going to change right along with it."

Disregarding such a major change in packaging techniques, the niche mixed paper has built for itself has given it renewed market power that is expected to continue for the foreseeable future.

The author is assistant editor of Recycling Today and can be contacted via e-mail at [e-mail].

EUROPEAN PAPER RECYCLING CONFERENCE HEADS TO BRUSSELS

The Recycling Today Media Group has announced the launch of the European Paper Recycling Conference, Oct. 3-5, 2005, at the Hilton Brussels Hotel in Brussels, Belgium.

The European Paper Recycling Conference will offer paper stock dealers, brokers, consumers, mill representatives and equipment and service providers involved in the paper recycling industry the opportunity to discuss the current state of the European and global recovered fiber markets.

Highlights of the European Paper Recycling Conference include:

* Timely, informative educational sessions focusing on current market issues and conditions.

* Panel discussions and roundtables with prominent industry leaders from throughout Europe.

* A display area featuring the latest product and service offerings.

* Extensive networking opportunities to build new contacts and business.

For delegate information, e-mail Michelle Fitzpatrick at [e-mail]. For sponsorship and display information, e-mail Jim Keefe at [e-mail].

Organizations supporting the conference include the Confederation of European Paper Industries and the Independent Waste Paper Processors Association.