US mills to use record RCP volumes and OCC demand set to grow to 25.1 million tons this year

US paper and board mills are anticipated to use more recovered fiber in their production this year than ever before, jumping to represent nearly 45% of total paper consumption, according to recently published trade statistics

This is an increase from what the market has always been over the last 20 years – with about a 35-40% recycled content average of total US paper and board output.

The total share of recovered paper in finished paper and board production in 2024 is to top 43.9% compared with 43.6% in 2023, 42% in 2022, 36.6% about 20 years ago in 2005, and 25.4% in 2000, according to the 64th Annual Capacity & Fiber Consumption Survey published on May 17 by the American Forest & Paper Association (AF&PA). In 24 years, the total recovered fiber’s share of paper and board production is to jump 18.5% this year.

The growth is in old corrugated container (OCC) consumption. US mills this year are to use a record volume of OCC. They already are on pace to surpass record levels from three years ago, when mills consumed 24.32 million tons of OCC in one year during the Covid-influenced packaging demand surge. Now, after four 100% recycled-content containerboard machines with 2.4 million tons per year of combined capacity started up in North America, including three in the US totaling 2.1 million tons per year of capacity, OCC consumption is on a run-up.

The AF&PA survey shows that mills are to consume a record 25.12 million tons of US OCC this year. The 25.12 million tons, which is 800,000 tons more OCC usage this year compared with 2021’s highs, would be the biggest year on record for mill consumption of OCC.

Mills have been buying 20 million tons or more of OCC every year since at least 2014 and the first year of 20 million or more consumption was in 1995 at 20.5 million tons just as US actual box shipments were on the front end of a four-year 9% increase. In 2000, based on AF&PA data, mills consumed 20 million tons of OCC in total paper and board production of 96.05 million tons. In 2024, mills are expected to produce 66-68 million tons total of paper and board.

Mixed paper consumption in 2024 is to reach 4.1 million tons, according to the survey. The year-over-year climb is to be 460,000 tons from the 3.6 million tons of mixed mills took in during 2023. Still, mixed paper consumption mirrors recent years’ volumes, when mills consumed 4.0 million tons or more of mixed paper each year from 2019-2021.

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More OCC, less ONP

OCC’s gains in the last 20 years partly replaced mixed paper’s declines, as well as the fall seen in old newspaper (ONP) consumption. In 2005, mills consumed 34.2 million tons total of recovered fiber, with OCC comprising 20.0 million tons, mixed at 4.5 million tons, and ONP at 5.7 million tons.

In 2024, mills are to take in 5 million tons more of OCC, at 25.12 million tons, 400,000 tons fewer of mixed paper at 4.1 million tons this year, and almost 5 million tons fewer of ONP at 814,000 tons this year.

The drastic downfall in ONP consumption is directly tied to the shuttering of newspapers across North America. Two major newspapers in recent months moved their printing plants.

In March, the Los Angeles Times moved from its downtown Los Angeles printing press to Riverside by the Southern California Newspaper Group, citing rising rent costs. The LA Times‘ circulation numbers were to stay the same. At one time, the downtime press printed 1.5 million Sunday papers per week.

The 177-year-old Chicago Tribune‘s May 20 edition was the first time in history that the newspaper edition wasn’t printed in Chicago after the newspaper moved its production from the large plant along the Chicago River, where it had called home for 43 years, to a suburb, Schaumburg.

A report from November 2023 said that the rate of local newspaper closures “accelerated to 2.5 a week in 2023,” according to the Medill School of Journalism at Northwestern University.

The report said last year alone, more than 130 papers closed or merged, “and the country is on track to lose a third of its papers since 2005 by the end of next year.” More than half of all US counties have just one or no local news outlets today.

Recycled fiber rises as virgin fiber falls

Recovered fiber’s gains in total paper and board production occur as new and converted recycled paper machines started up as virgin capacity closed.

In North America, five machines with 2.4 million tons per year of additional 100% recycled containerboard capacity turned key by Domtar in Kingsport, TN, ND Paper in Wisconsin at its Biron mill, Cascades in Ashland, VA, Atlantic Packaging in Whitby, ON, and Pratt in Henderson, KY. The first of the mills started up in January 2023 and the last of the five started up in November 2023.

Permanent shutdowns, at the same time, represented about 80% of the total startup capacity. The 1.713 million tons of virgin capacity closures as of late came from major producers, including International Paper (IP) and WestRock, the two largest containerboard producers in North America.

In Orange, TX, IP shut two PMs of kraft linerboard production, totaling 700,000 tons, at yearend 2023. WestRock ended production at its North Charleston, SC, 280,000-ton kraft linerboard mill in August 2023, at its Tacoma, WA, 380,000-ton linerboard and kraft paper mill in September 2023, and at its 353,000-ton kraft linerboard mill in Panama City, FL, in June 2022.

Steady OCC, mixed prices this week

Buyers and sellers told Fastmarkets’ PPI Pulp & Paper Week this week that domestic OCC and mixed paper prices stayed firm since the start of May, when OCC prices remained mostly steady save for rises off the West Coast, and mixed paper prices hiked up by $5-10 per ton at the FOB seller’s dock.

Contacts this week said some mills built up raw material stock enough throughout May that they were pushing back on offers, while other mill groups sought additional OCC and mixed paper tons. One major mill contact said on May 23 that mills took “unscheduled downtime due to sales.”

“Several mills are full of OCC and pushing back, and others are looking to build inventory for the (Memorial Day) holiday weekend,” a seller contact in the Midwest said. “That being said, price remains unchanged.”

This article was taken from PPI Pulp & Paper Week. Speak to our team to learn more about our news and market analysis, prices, forecast and more.

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