PAPER RECYCLING
SCRAP FIBRE PRICES REMAIN VOLATILE BUT FARE BETTER THAN MANY COMMODITIES DURING COVID-19 CHANGE IN CONSUMER HABITS, BOOMING E-COMMERCE AND A SHIFT AWAY FROM PUBLIC SPACES SINCE MARCH WILL MAINTAIN VOLATILITY IN THE RECOVERED PAPER SECTOR GOING FORWARD BY KEITH BARKER, EDITOR
T
his year’s ISRI Spotlight on Paper was held virtually on June 3, with the aim of providing valuable insights for paper processors, MRF operators and mills on how the COVID-19 pandemic is affecting commodity prices for containerboard, tissue, pulp and various recovered paper (RCP) grades, both in the short- and long-term. Institute of Scrap Recycling Industries’ (ISRI) Chief Economist, Joe Pickard started the session by providing an introductory overview of the recovered fibre sector so far this year, and was followed by an in-depth sector-by-sector breakdown from industry analysts Jose Gonzalez and Sanna Sosa, both from AFRY Management Consulting. As of April 2020, according to Pickard, recovered paper prices were up 50 percent for this past April, compared to March 2020, and up about 40 percent overall compared to April 2019 numbers, based on U.S. Bureau of Labor Statistics information. “That’s significantly different than other major scrap commodities that ISRI members are processing,” said Pickard. “Most non-ferrous metal, including copper and copper-based alloys for example, are down about 21 percent as compared to this time last year. Aluminum based scrap is down about 20 percent, and iron and steel scrap are down almost 28 percent. Compare that to a 40 percent increase in recovered fibre prices, and it shows you a little bit of the changing dynamics that we’re seeing, not just across the recycling
36 Recycling Product News September 2020
stream, but within different major scrap commodities.” According to Pickard, looking at the domestic market, numbers from the American Forest and Paper Association show that in 2019 about 49.2 million tons of paperboard was recycled, compared to about 52.7 million tons in 2018. Most of this decline is attributed to the drop in recovered paper exports, which were down to 13.6 percent, mainly as a result of China’s import restrictions. He went on to say that if we look at the big picture in terms of exports from the United States so far in 2020, by major commodity type, for the first quarter, paper and fibre exports were down 14.5 percent. But he said there’s a large disparity within the different commodity grades. Pulp from recovered paper is up about 75 percent year over year for the first quarter of
2020, as compared to OCC, which is down about 17 percent. He also said, comparatively, newsprint is down 23 percent and mixed paper is down approximately 20 percent. “We’ve got a couple of different market dynamics going on, both domestically and overseas,” continued Pickard. “And then we’ve got all these other sources of resistance in terms of economic forces, but also in terms of society at large.” He said according to consultants John Dunham & Associates, preliminary estimates on the potential impact of COVID-19 on the paper recycling industry in the United States are that direct employment, in terms of U.S. paper recycling, has declined by about 8,000 jobs as a result of the pandemic. According to Jose Gonzalez, senior principle at AFRY, based out of Atlanta,
