Scrap Magazine

May-June 2012

bimonthly trade magazine covering the pro-profit recycling industry

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icture three trucks collecting scrap paper in the United States. One of them heads west and drives across the Pacific Ocean to China. Now picture three export con- tainers of paper at a U.S. port. Two of those three export containers get loaded on a ship that also heads to China. As the destination for 30 percent of all U.S. recovered fiber and 68 percent of U.S. recovered fiber exports, China looms large in the fortunes of this country's scrap paper recyclers and traders. It's fortunate, then, that most market watchers remain positive about the Chinese mar- ket despite some concerns. Even though the still- struggling global economy has affected China's manufacturing sector, containerboard mills have less-than-ideal operating rates, and the Chinese paper industry is loaded with debt, exporters and industry observers expect China's mills to grow even hungrier for recovered paper—and the United States is likely to remain the country's largest supplier. P A LOOK AT THE DATA Before 2001, Canada was consistently the largest export market for U.S. scrap paper. In 2000, for example, the United States recovered 47.3 million tons, according to the American Forest & Paper Association (Washington, D.C.), and it exported 11 million tons, according to the U.S. Census Bureau (Suitland, Md.). About 2.5 million tons of that material headed north of the border, and just 2 million tons went to China. But in the mid-1990s, China began to increase its paper and paperboard production capacity in response to its growth as a manufacturing base for much of the developed world. Demand for prod- uct packaging drove Chinese containerboard pro- duction into an even higher gear in the 2000s, and that growth has continued ever since. Whereas in 2000 the United States produced more than twice as much paper and paperboard as China, in 2010 China produced 105.6 million tons compared with the United States' 89.1 million tons, accord- ing to the United Nations Food and Agriculture Organization (Rome). U.S. recovered paper exports have followed this growth in demand. In 2001, China first surpassed Canada as the top destination for U.S. recovered fiber, taking in 3.3 million tons to Canada's 2 million tons. The export gap between China and the rest of the world has only widened from there. Fast forward to 2011, when the United States collected 52.8 million tons and exported www.scrap.org China became the largest foreign buyer of U.S. scrap paper in 2001, and its demand for U.S. recovered fiber has risen almost fivefold since then. importer of this grade, took in only 650,000 tons last year in comparison. China also dominated the market for old newspaper. Of the 2.4 million tons of ONP the United States exported in 2011, China received 1.5 million tons, up 16 percent from 2010. Its imports of other U.S. ground- wood papers also were up 16 percent, to 2.5 million tons out of the 3 million tons exported. Of the 2.2 million tons of pulp substitute grades exported, about half went to China. All told, China was the dominant market last year for all recovered fiber grade categories other than the chemical deinking grades, such as sorted office paper and ledger grades. The top market for those last year was India, which took in 151,000 tons. China was only the fourth-largest market, importing 83,000 tons. MAY/JUNE 2012 _ Scrap _ 67 more than 23 million tons, a record. About 15.8 million tons went to China—that's about 23 percent more than in 2010—and 7.9 million tons went to the rest of the world, a drop of 6 percent year to year. Driving last year's record export volume were old corrugated containers. OCC exports to China were up a whopping 44 percent, to 8 million tons, in 2011—that's more than 77 percent of all U.S. OCC shipments. India, the next-largest BOWL PHOTOGRAPH BY TARAN Z ; CHINA PAPER PHOTOGRAPHS BY ADAM MINT ER

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