Paper chain.

The export market continues to define the recovered fiber industry as worldwide demand for recovered paper continues to climb, according to George Chen of G&T Trading Co., who moderated the Spotlight on Paper session at the 2007 ISRI (Institute of Scrap Recycling Industries Inc.) Convention & Exhibition held recently in New Orleans.

Chen said annual new demand has reached some 9.5 million tons, with much of that demand coming from offshore export destinations like China. While this high level of demand creates a number of growth opportunities for the industry, meeting the needs of such a hungry market also presents its own challenges. First of all, Chen said that while the industry has raised the target recycling rate from 50 percent to 55 percent, there still may not be enough material to supply future demand.

Chen also identified the growing popularity of single-stream recycling programs as both an opportunity and a challenge to the industry. While single stream does offer the benefit of increased recovery, the programs have been criticized for delivering paper of lesser quality. According to Chen, mixed paper from single-stream sources has suffered, particularly in China and India. He said both countries have rejected loads of mixed paper over quality issues.

According to Chen, China remains one the key players in the global recovered fiber market. It is second only to the United States in paper and paperboard production, according to figures provided by Chen, and the production of paper and paperboard in China has doubled in the last decade.

Domestically, the production capacity story is not as bright, according to Edward Tucciarone, vice president of sales at Smurfit-Stone. Tucciarone said U.S. mill consumption of recovered paper has been on the decline--down 7 percent relative to the 1999 peak.

However, the recovery rate is growing in the United States, an encouraging sign, according to Tucciarone. Old corrugated containers (OCC) boast a particularly impressive recovery rate of 76 percent, he said.

[GRAPHIC OMITTED]

While China may be one of the biggest names in the paper export market, it's not the only country with a strong appetite for recovered fiber. Mexico is also a buyer of the world's recycled paper, according to Rogelio Silva of Durango McKinley. In 2005, Mexico consumed some 4.2 million metric tons of secondary fiber, and more than 58 percent of that fiber consisted of brown grades, according to Silva. About 38 percent of the material consumed in 2005 was imported, which represents about 1.6 million metric tons.

According to Silva, total paper consumption in Mexico is projected to reach 8.1 million metric tons by 2010. Consumption of secondary fiber is expected to grow to 5.1 million by that time.

(Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)