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Market opportunities for additional tonnage of scrap paper from businesses

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Andover International conducted a supply-demand study to determine if Pacific Northwest paper mills and the export market could absorb an additional 80,000 tons of scrap paper per year generated from businesses.

Metro estimates that an additional 80,000 tons per year of scrap paper can be recovered from commercial sources.

Because of favorable freight cost to mills in the Pacific Northwest (PNW), the estimated additional 49,000 tons of old corrugated cardboard, old newspapers and high grade scrap paper (uncoated printing and writing paper) from the Portland metropolitan area will be welcomed and even preferred by these mills. The quality of material collected in the Metro region is superior to other sources that have lower environmental awareness. Paper grades recovered in the Metro region currently supply less than 11% of PNW domestic demand and 13% of total PNW requirements (including export).

“Mixed” scrap paper is composed of a broad combination of bleached and unbleached paper, paperboard, and coated and uncoated wood-free and wood-containing grades. Finding markets for the additional 31,000 tons of Mixed will be a challenge. However, since most of this material will come from office buildings, a substantial portion could be sent to mills that manufacture newsprint. The residual mixed paper, which has high proportions of old boxboard, probably has to be exported, because existing supplies far exceed the limited use of this material by mills in the Pacific Northwest (and the entire West Coast).

Local scrap paper processors want more scrap paper, and they are confident that they can produce quality products from the additional recovered material. Processors do express some concern about how generators prepare their recyclables and how collectors handle/accept the material.

Scrap paper prices are dictated by global market conditions, although regional mill shutdowns can have an affect on supplier shipping costs and commodity prices. U.S. scrap paper supply/demand conditions (including export sales) indicate that prices will remain essentially the same through 2006.

Other factors, such as energy and wood chip costs, are unlikely to affect the marginal demand for scrap paper. Sustained higher prices for these commodities could force some smaller older paper machines in the PNW to be idled. However, any reduction in PNW demand for scrap paper due to mill loss would come from suppliers with higher freight costs, whereas scrap paper from the Metro would continue to see high demand due to its proximity to the mills and general high quality.

Related Documents

• Market Opportunities for Additional Tonnage of Scrap Paper from Commercial Sources in the Metro Region 1.4M Adobe Acrobat PDF | Published December 4, 2007