The domestic recovered fiber sector continues to iron out the wrinkles caused by the Chinese government’s import restrictions and curtailed buying of U.S. secondary paper. Sources also cite concerns related to renegotiations of the North American Free Trade Agreement (NAFTA).
In a March 19 statement, American Forest & Paper Association (AF&PA) President and CEO Donna Harman supports NAFTA and advocates for free and fair trade policies that recognize the strong global position of the paper and wood products industry.
Harman writes, “NAFTA countries account for $9.6 billion, or 45 percent, of our industry’s pulp and paper exports, making them a vital industry market. As negotiators work to modernize NAFTA with Canada and Mexico, we support constructive changes that will ensure these markets remain open to our country’s exports and recognize the benefits of an interconnected supply chain.”
A paper recycler based in the U.S. South says, “I’m concerned about tariffs from Canada coming into the U.S. and how it’s going to increase their cost for new paper and whether it will impact recycled fiber.”
Another source says he, too, has “heard the concerns out of Canada,” with the focus being on newsprint prices.
“NAFTA countries account for $9.6 billion, or 45 percent, of our industry’s pulp and paper exports, making them a vital industry market.” – AF&PA President Donna Harman
Prices for most secondary fiber grades dropped across the board in the U.S. in March. Mixed paper and sorted residential paper and news (SRPN) fell $5 and $10 per ton throughout the U.S., according to the March 5 P&PW Yellow Sheet from Boston-based research firm RISI. Prices for old corrugated containers (OCC) also fell by $5 and $10 per ton in some regions and by $20 and $30 per ton on the West Coast. At $81.50 per ton, the U.S. average OCC price is almost $100 less than the $172.78 the grade sold for one year ago.
Exports to China saw the most dramatic drops in pricing. SRPN declined by $65 to $75 per ton FAS (free alongside
In February, the containerboard mill operating rate was 94.1 percent in the U.S., or 3.1 percentage points lower than in the same month last year, according to the AF&PA. Production for export was 6 percent lower in February 2018 compared with February 2017 and has been 8.4 percent lower year to date.
Continual unpredictability in the sector has some companies thinking of new strategies, while others are backing out of plans.
Containerboard production for export was 6 percent lower in February 2018 compared with February 2017, the AF&PA says.
The McKinley Paper Co. subsidiary of Mexico-based Bio Pappel reportedly has pushed back its plans to reopen a paper mill in the U.S. Pacific Northwest that it purchased in March 2017. Plans to retrofit the mill in Port Angeles, Washington, have been “put on hold,” according to an online article posted by the Peninsula Daily News. The mill had been targeted for reopening before the end of 2018, but a McKinley Paper vice president the media outlet quotes states, “That’s not going to happen,” adding, “things are happening in the market” to cause the delays.
Northbrook, Illinois-based KapStone Paper and Packaging Corp. announced in late March its plans to invest $6 million in new equipment at its paper mill in Cowpens, South Carolina.
The mill produces recycled-content