METRO
Solid Waste Department
600 NE Grand Ave.
Portland, OR 97232-2736
(503) 797-1650
Fax (503) 797-1795
Mixed scrap paper (MSP) is the largest single fraction of the residential waste stream that is not widely collected through curbside programs. The City of Portland added this material to its curbside program in September 1993 and other cities in the Metro area are considering adding it to their programs.
The aggregate quantity MSP collectors and processors handle has not changed appreciably since 1991. However, they report increased participation in existing collection programs, and MSP recovery through residential curbside collection has increased in the Metro area. This inconsistency may be due to increased recycling of higher grades of paper, and thus reduced generation of MSP.
Mill capacity for MSP is expanding, demand is rising and prices are increasing sharply.
Households and offices
70,973(1)
[FOOTNOTE 1: The term "mixed scrap paper" (a.k.a MSP or "mixed waste paper") includes a mixture of recyclable papers such as:
"Generation" is the sum of Metro waste disposed and recovered for secondary use.]
21,762 tons(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 based on the 1993 Metro "Recycling Level Survey.")]
$0 to $35 per ton(3)
[FOOTNOTE 3: This is the range of prices West Coast mills paid for #1 MSP in July 1994.]
Taking off
Recovery of post-consumer MSP is in its infancy. A few local drop-off centers in the Metro area accept this material, and the city of Portland added MSP to its curbside collection program in September 1993.
Most MSP is used as feedstock at Northwest mills to make corrugating medium and in overseas mills to make boxboard. Other secondary markets for this material include:
Demand for MSP currently exceeds supply. Demand for all grades of recovered paper is increasing due to expanding domestic mill capacity. The supply of MSP is constrained, however, as collectors are cautious about adding materials to comprehensive recycling program until recycling markets are firmly in place and mill prices justify collection costs. This imbalance has caused mills to go from charging up to $25 per ton to accept MSP in July 1993 to paying in excess of $35 per ton in July 1994.
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 can be minimized in several ways. Good quality recovered material typically cost less to process and market than poor quality recovered material, so educating waste generators and collectors about contamination issues can be effective. Processing costs also can be reduced through technological advancements and process refinements. The paper industry, private recyclers, and government recycling programs are working together to minimize collection and processing costs through education and technological advancements.
There are 43 regular and 37 specialty grades of recyclable paper, each of which has different fiber qualities and end uses. Generally speaking, the better recovered 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 corrugated cardboard, the largest secondary market for MSP in the region, is tied closely to the general economy. Demand for MSP has followed the general economy in 1993-94, remaining tepid during most of 1993, then taking off in late 1993 and the first half of 1994.
Graphic: Average Price/Ton for Mixed Scrap Paper (1991-1994) [(See Source Document)]
Recovery of MSP is expected to rise through 1995 for several reasons. First, opportunities to recycle this material conveniently are expected to increase. How many collection programs will capture this material in the short-term is unclear as some collectors and local governments remain skeptical about he development and strength of markets. Nevertheless, mills are importing MSP from out of state and they are discussing long-term contracts for material from municipal collection programs.
Second, in-region mill capacity is increasing. Third, global demand for U.S. recovered paper is expected to remain strong. Fourth, additional capacity to process unmarketable MSP for energy recovery is expected to come on line in 1994. Fifth, technological advancements may enable MSP to be used in alternative applications, including molded pulp, insulation board and industrial alcohols.
The City of Portland added MSP to its curbside collection program in September 1993. More than 400 tons per month of MSP currently are being recovered through this program, and the per-household recovery rate is expected to continue to climb with sustained education and promotion. Of the 75% of curbside customers that set out recyclables, 60% currently set out MSP.(4)
[FOOTNOTE 4: City of Portland Curbside Scrap Paper Update, June 1994.]
At current levels, recovery would exceed 50,000 tons per year if MSP were collected curbside throughout the Metro region. Surveys of curbside customers indicate they are pleased with this program. City officials report that contamination is low and quality is high. Given these encouraging results, the City is planning on adding scrap paper to its multi-family recycling program during Fiscal Year 1994-95.
The industry demand for all major categories of sorted, recovered paper is large and growing. More than $1.1 billion dollars will be spent between 1989 and 1995 to increase recovered paper processing capacity in Oregon and Washington mills.(5)
[FOOTNOTE 5: RMDC Paper Report.]
Oregon and Washington mills had the capacity to consume 124,730 short tons of recovered MSP in 1992. This is projected to jump to 289,000 short tons by 1995.(6)
[FOOTNOTE 6: Strong demand for higher grade paper products is attracting higher grade recovered paper and creating substitution opportunities for MSP in manufacturing lower-grade paper products.
Global demand for U.S. recovered paper should keep pace with the increasing worldwide supply for several reasons: U.S. recovered paper is relatively high in quality. Worldwide recycled fiber manufacturing capacity continues to grow. The US, Japan and Germany are rebounding from recession. This will increase demand for paper products generally.
Graphic: Mixed Waste Paper Composition Estimate [(See Source Document)]
The North American Free Trade Agreement and recent revisions to the General Agreement on Tariffs and Trade should reduce trade barriers with major importers of U.S. recovered fibers, including Korea, Singapore, Hong Kong, China, Mexico and Canada. Favorable currency rates also are boosting overall US exports to Asia. US recovered fibers will compete with European and Asian recovered fibers for these markets.
While prospects for MSP recycling are good, a number of factors temper the outlook for this material. First, strong markets for recovered papers are prompting increased "high-grading" of certain types of papers present in the MSP mix, thus resulting in a lower quality residual mix. Second, export markets are fickle. MSP prices historically have been volatile, primarily due to shifts in export demand.(7)
[FOOTNOTE 7: "Looking into a crystal ball: What explains the value of recovered paper?" Resource Recycling Recovered Paper Supplement, November 1993.]
Changes in currency rates, the global supply of recovered fibers, political instability in foreign countries, and a myriad of other variables can negatively impact foreign demand for US recovered fiber. Third, mandatory participation in California residential curbside recycling programs may increase the supply of recovered fiber available to Northwest mills and drive prices for in-region recovered fibers down.
Last Updated: November 1, 1995