Recycling in a smaller world.

An increasingly global economy is changing the face of the recovered fiber market, according to Bill Moore of the Atlanta-based consulting firm Moore & Associates.

Moore moderated the keynote session on the global nature of today's paper market at the 2006 Paper Recycling Conference & Trade Show, held June 25-27 in Chicago. He told attendees that from 2000 to 2005, North America's share of the recovered fiber going to China shrank from 80 percent to 46 percent. While North America is still supplying nearly half of China's imported recycled fiber, other players have snapped up market share in recent years, including Western Europe and Japan--a consequence of globalization.

Moore identified several factors driving the market for old corrugated containers (OCC), including China's paperboard overcapacity and continuing shutdown of U.S. paperboard mill capacity. According to figures provided by Moore, of the 10 million tons of new worldwide paper making capacity started up in 2005, only 8 percent was in North America. In addition, more than 2 million tons of capacity has been shut or is scheduled for closure in 2006 in North America, according to Moore.

R.S. Baxi of J&H Sales International Ltd. told attendees that the demand from China is be expected to continue because of the expanding paper production in the country in plants that rely mainly on imported material. He said production rates in China were nearly 20 million metric tons in 1995 and are expected to reach 80 million metric tons in 10 years. "As production continues, so will demand," said Baxi. He also identified Japan as an emerging key player in the Asian market exporting to China.

Steve Voorhees, CFO of Rock-Tenn Co., Norcross, Ga., identified increasing price transparency as another factor having a sizable impact on the way fiber moves around the world. He said that in the domestic market, the use of published pricing decreases the importance of marketing material somewhat.

On the consuming side, Voorhees said mill shut downs and increasing price volatility are putting North American mills under pressure, as is the competitive disadvantage recovered fiber faces against virgin material.

This domestic pressure is helping export markets to gain increasing importance, which is being fed by current strong demand from China, he added.

The advent of single-stream recycling is another factor changing the marketplace, according to Steve Wilson, director of marketing for the fiber group of Waste Management Recycle America, based in Houston. "The domestic industry is not as strong as it used to be," he said, adding that consumption is shrinking while the sources of fiber are changing, with much more material coming from single-stream sources.

Single stream, Wilson said, has increased the volume of material collected, which in turn has lead to an increase in capital investment in facilities to make them capable of handling the influx of material.

According to figures provided by Moore, single-stream processing systems have seen a dramatic increase since 1980, and single stream and dual stream combined dominate today's MRF processing systems.

The 2007 Paper Recycling Conference & Trade Show will be June 10-12 in Orlando.

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

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