1993/1994 High-Grade Paper (HGP) Market Profile August 1994

Solid Waste Department
600 NE Grand Ave.
Portland, OR 97232-2736
(503) 797-1650
Fax (503) 797-1795

Key Facts

Major Generators

Offices, recycling drop-off centers.

Estimated Generation

50,247(1)

[FOOTNOTE 1: Generation equals quantity recovered from the Metro area for secondary uses plus quantity disposed.]

Estimated Recovery

23,508 = 47 percent of generation(2)

[FOOTNOTE 2: This is "post-consumer waste" which is defined in Oregon statute as a "material that would normally be disposed of as a solid waste, having completed its life cycle as a consumer or manufacturing item." This figure is from the Metro's 1993 Recycling Level Survey. The term "high-grade paper" (HGP) includes computer printout, ledger-grade printing and writing paper, bond and copy machine paper and other bleached papers that can be deinked. A recovered HGP mix can be defined differently depending on the individual mill's pulping methods and the specific end-use product being made. The quality and consistency of HGP are dependent on the paper products targeted for collection in a given office.]

Northwest Manufacturers

Handlers/Processors

are the major handlers/processors in the Metro area.

Origin of Recovered Material

Western United States and Canada.

Secondary Uses

Location of End Markets

Pacific Northwest, Canada and Asia.(3)

[FOOTNOTE 3: These are the locations of end-users of high grade paper recovered from the Metro area.]

Market Value

[FOOTNOTE 4: These are average prices West Coast mills reported paying in July 1994. "Office Pack" is a mixture of high-grade office papers that includes copy paper, letterhead, computer printout, colored office papers, direct mailings, fax paper, and glossy brochures.]

Major Factors Affecting Market Value

Recovery Trend

Increasing

Outlook

Favorable

Overview

Collection programs for this material continued to expand in 1993, and haulers, government recycling coordinators and end-users all are seeing increased recovery of this material. According to Metro's annual Recycling Level Survey, recovery of high-grade paper declined in 1992 and 1993. However, 1991 and 1992 recovery totals were inflated due to inaccurate reporting which included some pre-consumer material. Thus, available data for this material do not accurately reflect recovery trends.

Demand for recovered high-grade papers has increased since March 1992 when James River opened a new deinking mil in Halsey, Oregon. This mill uses new technology to convert a wide range of mixed office papers into deinked pulp for making printing and writing papers and tissue products. It recovers 160,000 tons of recovered office papers per year, nearly half of which come from sources in Oregon and Washington. The James River office paper plant in Camas, Washington, and the Boise Cascade envelope and office paper plant in Vancouver, Washington also are using increasing quantities of high-grade papers.

President Clinton's 1993 Executive Order mandated increased use of recycled-content printing and writing papers by federal agencies, thus stimulating additional demand for recovered office paper.

Recycling Infrastructure

Most HGP is collected source-separated from large and small offices, with the majority coming from large offices. Some offices sell source-separated material to buy back centers. Collection directly from offices is done by private services that vary in size.

Most HGP is color-separated, but recovery of commingled white/colored office papers is increasing due to the convenience and economy of Weyerhaeuser's ROW and the Metropolitan Disposal Company's Office Pack programs. These have been developed to meet the needs of the new James River mill which accepts mixed loads of white papers, colored papers, envelopes, direct mailings, coated papers (faxes, brochures, etc.), and file folders. This makes recycling more convenient for small businesses that lack the space and waste paper volumes needed for more sophisticated office paper recycling schemes.

Secondary Uses

Most recovered HGP is used as feedstock to manufacture printing and writing papers and tissue products. Other secondary markets for this material, include liner board, core stock, and protective packaging.

Primary Recycling Process

The process for manufacturing different types of paper is essentially the same. Recovered paper is "hydropulped" to separate the paper fibers. In this process, a mixture of recovered paper and water is beaten in large vats.

The resulting recycled pulp is then deinked and blended with virgin wood fiber that has been pulped in a separate chemical-mechanical process. Blended pulp is then sprayed onto a moving screen. Fibers which are too short for specific grades of paper pass through the screen and out of the papermaking process at this point. This is a crucial step for the use of recycled paper as recycled fibers generally are shorter than virgin fibers. Pulp containing fibers of sufficient length is pressed between felt rollers to remove excess moisture. It then passes over a series of hot rollers that reduce its moisture content further. After this stage, paper can be coated, rolled, cut and formed.

Factors Affecting HGP Markets

Supply and Demand

The supply of recovered office papers is expanding as participation in collection programs increases. At the same time, demand for this material is increasing.

Historically, HGP prices have experienced cyclical demand-side swings related to paper and paperboard output.(5)

[FOOTNOTE 5: "Looking into a crystal ball: What explains the value of recovered paper?" Resource Recycling Recovered Paper Supplement, November 1993. These are average prices paid by Metro-area buy back centers and Pacific Northwest mills, reported to Metro for its quarterly Market Price Report. They are intended strictly to illustrate relative changes and trends overtime.]

These are a function of the general economy which has been improving during the first two quarters of 1994.

Raw Material Prices

Pacific Northwest mills rely on three principal sources of fiber other than recovered paper. These are chips and residue from lumber mills, utility or cull logs available as a byproduct of timber production, and virgin timber. Timber harvesting restrictions on federal forestland in the Pacific Northwest have caused the price of all of these sources of fiber to increase in recent years, improving the competitiveness of recovered fiber prices.

Collection and Processing Costs

Recycled fiber facilities are usually more expensive to operate than virgin facilities. One of the reasons for this is that the use of recovered paper increases quality control expenses. Chemical additives often are required to compensate for reduced fiber strength. Additionally, contaminants require process adjustments and can lead to increased machine run interruptions. Paper machines often have to operate at reduced speeds, raising costs per unit of output. Paper breaks occur more often lowering productivity. Moreover, the approximate 30 percent weight loss associated with recycling recovered paper means that 100 tons coming into a plant may yield only 70 tons of pulp, with the remaining 30 tons being waste material or sludge.(6)

[FOOTNOTE 6: 1992 Recycling Markets Development Council: Paper Report.]

Stock preparation is an important part of the recycling process. This process involves repulping, removing contaminants and preparing recovered fibers for paper making. Contaminants can affect finished product quality or the ability of paper machines to operate. Heavy contaminants include metals such as nuts, bolts, wires, staples and soda cans as well as sand, rocks and glass. Light contaminants include plastic, Styrofoam, waxes, glues, adhesives, pressure-sensitive adhesives, and wood.

Nearly all Northwest mills contacted for a 1992 Northwest Pulp and Paper Association survey indicated that they prefer to receive materials from total source-separated systems because they get better quality material and it requires lower capital costs for secondary fiber processing. Nearly all of them also said they prefer that the recovered paper they receive be baled.

Secondary Product Value

There are 43 regular and 37 specialty grades of recyclable paper, each of which has different fiber qualities and end uses. Generally speaking, the more carefully paper is sorted and separated, the more valuable and useful it becomes in the recycling system since mills need feedstocks with known and consistent characteristics to create products with predictable qualities.

Demand for recycled-content printing and writing papers is increasing nationally due to expanding interest in "green business" practices, and legislation requiring public agencies to buy recycled products, particularly paper.(7)

[FOOTNOTE 7: In 1993, recycled-content products commanded 13 percent of the US printing and writing paper market, according to the results of an industry survey reported in "Paper Recycler," August 1993, Vol. 4, No. 8.]

Outlook

Recovery of high grade office papers is expected to continue to rise for several reasons. First, HGP commands a premium price in secondary markets, so private collectors will continue to extend the opportunity to recycle it conveniently to offices of all sizes. Second, there is significant in-region mill capacity for this material and in-region demand is increasing. Third, public and private procurement of recycled-content printing and writing papers will continue to grow as public agencies respond to recycled product procurement mandates and private businesses increasingly demonstrate that they are environmentally responsible. Fourth, global demand for US recovered paper is expected to remain healthy.


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Last Updated: November 9, 1995