August 7, 2017
The most recent update on the large subject of recovered paper by the American Forest & Paper Association, May 10, can be found at www.paperrecycles.org/statistics.
While “waste” would not be glamorous for most of us, since we do not consider it a primary product, it is a significant business; domestic OCC collection makes it the most recovered and reused material in the U.S. We are the most desired global exporter of used corrugated cartons because of the excellent quality of the inclusion of long-fiber Southern pine in U.S.-produced linerboard.
The top five countries for exports of U.S. OCC are shown in the chart below. Total collection of OCC in the U.S. approaches more than 32 million tons per year. This translates to a 92 percent recovery rate. Domestically, International Paper and WestRock are the largest purchasers of OCC. The U.S. containerboard system uses about half of the OCC collected, and one major mill system uses up to 75 percent mixed office waste in its furnish.
OCC is one of several categories under the broad umbrella of recovered paper, which also includes double-lined kraft corrugated (clippings), mixed paper (China again receives about 51 percent of the 7.8 million tons exported), old newspapers, sorted office papers, hard white envelope cuttings, sorted white ledger, and coated groundwood sections. Prices are published monthly in RISI’s Pulp and Paper Week.
The wide swings in pricing for this product are really well-covered in trade publications and with security analysts because the rapid upward advances in prices, and the speed of that upward movement, is usually the prime consideration for containerboard price announcements. But these wide swings have been greater than the tide movements at the Bay of Fundy. There was a $50 per ton price run-up in March and now a $35 decline. We have seen a $100 per ton increase in domestic containerboard since the fall of 2016, but now only an average realized OCC price increase domestically of $38 during that same period. In the U.S., the average recycled content of containerboard is about 46 percent, so you do the math! Export and domestic prices operate separately, as do containerboard prices and inventory levels by U.S. containerboard producers and Chinese mills.
China appears to have been burned by less-than-stated quality levels and is instituting higher standards for incoming shipments. The National Sword is a Chinese inspection program on mixed waste, not OCC. In North America, quality is also an issue. Cascade states that Canada uses a single-stream system vs. the U.S., which mostly operates a dual recovery system. Canada also is constrained by extended producer responsibility programs. Reject rates differ between the two countries, with the higher rate in Canada being a possible reason Kruger’s new Trois-Rivières mill is the first in North America to install five-stage cleaning.
OCC material generation may change slightly going forward as e-commerce grows. Most OCC collections are at big-box stores that see the product for its cash value.
While I keep informed of these movements daily, you may just opt for your monthly electronic edition of Scoring Boxes, which shows up in your inbox the middle of each month as a benefit of your membership in AICC. Look at the chart comparing OCC and linerboard pricing over the last 10 years to see how they relate one to the other, please!
Ralph Young is the principal of Alternative Paper Solutions and is AICC’s technical advisor. Contact Ralph directly about technical that impact our industry at askralph@aiccbox.org.
