The Catablog
Posts Tagged ‘north american paper mills’
The Effect of Post-Consumer Waste Paper (PCW Content)
As a catalog printer, from time-to-time, Arandell will receive concerns from environmentalists about the products we produce and the materials used to produce them. (You can imagine, as the one charged with purchasing all o f our paper, I take an interest in these concerns because most of them revolve around paper!) In a previous article I addressed the “greenness” of catalogs and direct mail pieces. As I continue to research the environmental impact of direct mail pieces I am finding helpful tools to calculate the positive and negative impact of direct mail.
A tool that I found most interesting was created by the paper suppler West Linn. The tool helps calculate the impact of using PCW (Post-Consumer Waste) paper. Click here to use the tool. This is a impressive calculator because users are given the opportunity to change multiple variables, such as PCW percentage and paper tonnage and basis weight on their paper grades.
At Arandell, we implement best practice green initiatives in both the office and manufacturing facilities. We are certified to produce catalogs on FSC (Forest Stewardship Council), SFI (Sustainable Forestry Initiative) and PEFC (Programme for the Endorsement of Forest Certification schemes) certified papers.
If you are interested in using “green” certified papers let us know! Along with aforementioned calculator we have various tools at Arandell that can help you calculate the positive environmental impact your paper choice will create.
Price Increase for Coated Freesheet Grades
I just received the following letter from Verso executive Michael Weinhold.
Click here to read the letter.
I find this letter to be extremely interesting. I was expecting mills that were garnering large sums of money from the black liquor tax credit to announce increases by the end of the year (as per my earlier post), but Verso has just jumped the gun on everyone. We aren’t sure at this point if it will stick. I think a lot of it depends on what the other coated freesheet producers (NewPage, Sappi, Appleton Coated, West Linn, etc.) do in response to this. Some of them have been taking money from the tax credits, but others haven’t.
We will keep you posted. Any questions, please feel free to contact your sales rep or myself directly.
***SEPTEMBER 2, 2009 UPDATE***
I also recieved the following letter from NewPage proclaiming their price increase. It appears this will be an industry trend….
Electronic vs. Printed Communication: The Sustainability Battle
As the United States House of Representatives sends the newly passed “cap & trade” legislation over to the Senate for debate, I thought now might be a good time to discuss electronic versus paper communication.While it is true that both can (and should) be used in concert with each other, is one better than the other from a sustainability standpoint? The answer is a resounding “YES.”
Consider the issue of inputs/raw materials being renewable. Printed communication uses paper as its primary material. Paper comes from trees, which are a renewable resource, and have been for longer than humans have been on the planet. Since this is the case, and since forest products companies rely on trees for their products, they take great care to “renew” their main resource. The forest product industry plants 1.7 million trees per day, more than three times what they harvest. The primary materials used to make a computer require the mining and refining of many different metals and minerals (including gold, silver and palladium). These are non-renewable resources from the standpoint that an individual cannot just “plant” a metal or mineral.
In addition, paper and printed pieces have a leg up on the electronic medium when it comes to energy consumption. 60% of the energy required to manufacture paper in the U.S. comes from carbon neutral sources and is produced onsite at the paper mills. Compare that to the electronics industry, which obtains over 90% of its power from the national power grid, a large part of which is greenhouse gas-emitting, coal-powered power plants.
As well, paper products stand a much better chance of being recycled properly. Nearly 60% of all paper in the U.S. is recycled annually, while only 18% of electronic devices are; and of those that are, almost none are being reused for other products. E-waste is the nation’s single largest toxic waste export.
Some interesting facts, courtesy of International Paper:
- 20% Less CO2 is used per year by a person reading a daily printed newspaper versus a person reading web-based news for 30 minutes a day.
- On average it takes 500 kilowatt-hours of electricity to produce 440 pounds of paper, the typical amount of paper each individual uses in a year. That’s the equivalent of powering one computer continuously for five months.
- It costs an estimated $2.8 billion of energy to leave computers sitting idly overnight in the U.S. On a CO2 basis, that’s an amount equivalent to four million cars on the road.
The paper industry has had much more time to figure out how to be sustainable and responsible. In time, the electronics industry will do the same. But, until then, paper and printed communications have the upper hand when it comes to being sustainable. And while a balance is required between the two for effective communication, it is important to keep the above facts in mind when finding that balance.
Fraser Papers Files for Bankruptcy Protection
Fraser Papers, which operates two paper mills and two pulp mills, produces mostly uncoated publishing grades, although they do manufacture some coated groundwood products. Annually, they produce 410,000 tons of paper and 615,000 tons of pulp. The company claims that, at least initially, their operating plans remain unchanged, and that they will continue to manufacture specialty paper products for existing clients. How long that continues to be the case depends on how much cash they can generate to continue operations and how many orders they continue to receive.
This is the second North American mill to file for protection this year, click here to see the first. A continuing trend? Doubtful. But, if Fraser fails to generate enough cash to keep paper operations going, it will force many of their clients to seek paper elsewhere, and that could tighten the market up.
Does Summer Bring a Better Paper Market?
Could it be true? Could the paper market be correcting and things starting to look up?
In discussing current market affairs with many of our paper suppliers, the answer seems to be a guarded “yes.” While the first and second quarters have seen a tremendous amount of downtime taken (both temporary and permanent), the mills feel that the moves they have made have been adequate enough to balance their supply with market demand. We shall see. But one thing is for sure: any more months of +/- 20% paper ship rates, and the paper mills could be in more trouble than they are now. No one wants to see that.
What does this guarded optimism mean for prices? Well one thing is for sure: the drastic reduction in paper prices we have seen the last two quarters cannot be sustained. The mills have given back most, if not more than what they gained over the last 18-24 months. And while the mills’ costs have decreased as well, they have not decreased in tandem with price decreases.
Does this mean that increases are on the way? I highly doubt it. Are we going to continue to see the vast differences in pricing levels that we have seen over the past six months? I doubt that as well. Whatever your paper price is today, feel confident that you are not going to see any increases through the end of the year. Also feel confident that you are not “missing out” on some paper price deals by continuing to shop around.
One thing to watch: black liquor credits. What is that? Black liquor is a by-product of the paper making process that is created and then re-used elsewhere down the process chain. Some mills have been able to apply for, and receive large amounts of government money under a loophole in a budget bill passed in 2005. That loophole is set to expire soon, and some members of Congress are looking to close it sooner. Those mills that are relying on this additional loophole funding now might be caught in a bind sooner rather than later if this loophole closes before it is supposed to. If you would like more information about this, please just let me know.
2009 Paper Prognostications
Recently, I was asked a series of questions about the paper market and where it is heading in the near and long term. I thought I would share some of my answers with you.
Q: What do you see as far as paper prices for the first quarter?
A: I see paper prices as a whole going back down to the levels we saw during the 2nd quarter last year. That would mean a drop of about $40-$60 ton overall. Coated groundwood will drop faster and perhaps farther than coated freesheet will. But how much depends on where supply and demand are.
Q: How would you describe the current conditions in the market as they relate to paper prices, supply and demand?
A: Right now, demand has dropped MUCH faster than the coated mills can cut their production and inventory levels. This has led to shorter than normal lead times, excess inventories, and reduced prices across the board. Since most, if not all mills are still not turning a profit (despite such dramatic price increases over the last six quarters), I believe they will try and hold the line on price. In order to do this, they will attempt to reduce capacity to a point more in line with demand. This could be very tricky, as demand continues to decrease at a rapid pace with no apparent bottom in sight.
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