Wednesday, April 28, 2010

Another Recycled Newsprint Mill Is on the Ropes

High prices for recycled paper are threatening to shut down what may be North America’s premier recycled-newsprint mill, Catalyst Paper revealed today.

“Increasing ONP [old newspaper] prices will negatively affect manufacturing costs at the Snowflake mill, and could result in future production curtailment at that mill,” the company said in its first-quarter earnings presentation.

The Snowflake, Arizona mill uses only recycled fiber, not virgin fiber in its products. Catalyst bought the mill in early 2008 when the Justice Department forced Abitibi to sell Snowflake before merging with Bowater. Some observers thought the feds chose Snowflake because it was Abitibi’s lowest-cost mill.

The newspaper industry’s woes have led to reduced supplies of recycled newsprint, while huge new paper machines in timber-short China have created more demand for recycled paper.

The result is that prices for some types of recycled paper have tripled in barely a year. The rising costs of recycled fiber have already forced four other North American newsprint mills to close this year, industry analyst Verle Sutton wrote recently in Recycled Newsprint Machines are Becoming an Endangered Species.

“Demand [for recycled fiber] exceeds supply and will continue to exceed supply for many years,” Sutton added last week.

For more information about paper with recycled content, please see:
  • Three, or Maybe Four, Green Magazine Pioneers, which has this quotation from Hearst, which uses recycled fiber extensively in its newspapers but not its magazines: “After extensive review, we currently believe newspapers and other end uses (packaging, wallboard, etc.) are the most efficient use for recycled fiber, which continues to be in short supply.”
  • I'm an environmental idiot!, which backs up the Hearst claim – showing that using recycled fiber in newsprint makes more sense environmentally than in such higher-grade products as office paper or paper for catalogs.
  • Noisy Boise Is Reviving Its Newsprint Sales,which shows how one company used black-liquor tax credits to take market share last year from recycled-newsprint mills (including Snowflake).
  • Hey, big boy, can I recycle your cardboard?, which tells what happened when the number for a toll-free recycling-information line was taken over by a telephone-sex service – and reminds us that there was a brief glut of recycled paper in late 2008 and early 2009.

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