US mills consumed more total recovered paper in the first half of 2024 year-over-year, and especially for US old corrugated containers (OCC) and mixed paper, according to quarterly data published by the American Forest & Paper Association (AF&PA).
Total recovered fiber consumption at US mills crept up 6.8%, or more than 1 million tons, from January to June 2024 year-over-year, from 15.40 million tons in the first half of 2023 to 16.44 million tons in the first half of 2024.
US mills’ hunger for OCC gobbled up 8.2% more tons of the bulk grade in the first half of this year, at 12.34 million tons, compared with 11.40 million tons in the first half of the year prior, a 935,100 ton-climb in one year. For mixed paper, mill consumption improved 3.9% year-over-year, to 1.911 million tons from January to June 2024 from 1.84 million tons from January to June 2023.
Monthly consumption for both mixed paper and OCC also jumped when comparing June 2024 vs June 2023. US mills bought 8.4% more OCC in June of this year, at 2.02 million tons that month, compared with 1.86 million tons in June 2023. Mills so far this year have purchased 2.0 million tons/month of OCC. This compares with 2023, when mills took in 2.0 million tons monthly of OCC only two months out of the year: in August and in December, both at 2.03 million tons per month.
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Henderson, other PMs ‘running very strong’
Consumption ballooned in the last year with new recycled capacity at North American mills. In North America, five machines with 2.4 million tons/yr of additional 100% recycled containerboard capacity started up between January 2023 and December. The startups include Domtar’s converted paper machine (PM) in Kingsport, TN, Cascades’ new mill in Ashland, VA, ND Paper’s Biron mill in Wisconsin Rapids, WI, Atlantic Packaging’s 400,000/yr PM in Whitby, ON, Pratt’s new mill in Henderson, KY, and an upgrade at Packaging Corp of America’s (PCA) Jackson, AL, mill added more demand for OCC.
These startups are running seemingly well, contacts told Fastmarkets’ PPI Pulp & Paper Week (P&PW) in August. Some have faced hiccups related to mostly equipment issues, such as a “defective part” at Cascades’ Bear Island mill in Virginia that slowed the PM.
In Kentucky, a contact told P&PW that Pratt’s Henderson mill is “definitely running very strong.” A seller contact said Pratt “has been fairly aggressive for their Henderson mill” for mixed paper orders.
“(At Henderson), they’re making the hell out of some paper,” a contact said of the Kentucky mill. “They’re still a young paper mill.”
Mixed inventories down 18.5%
Inventories at US mills for mixed paper fell dramatically in June 2024, according to AF&PA’s quarterly report. Mills had just 97,000 tons of mixed paper raw material stock in June 2024, a decrease of 18.5%, or 22,000 tons, compared with 119,000 tons of stock in June 2023. In all of 2023, monthly mill inventories of mixed paper didn’t dip below 108,000 tons/month in any month of last year. Supplies of mixed paper slowed some this year for a host of reasons, including more technologically advanced material recovery facilities sorting out more OCC rather than mixed, as WM’s VP of Recycling Brent Bell told P&PW in August, as well as wet weather dampening loads, and increased quality concerns as a result.
Mills held nine days of supply of mixed paper in the second quarter, and for OCC, just seven days of supply. At 475,1000 tons, monthly raw material stock of OCC in June 2024 declined 4.3% vs June 2023’s monthly inventory levels of 496,2000 tons.
“Everybody is taking (OCC) …,” a supplier contact in the East said, and “we’ve had a couple of mills asking for extra trucks.”
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