At the closing panel of the Paper & Plastics Recycling Conference in Chicago on October 20, mill buyers from across North America discussed the current waste paper market challenges and how their businesses are doing since the onset of the coronavirus pandemic. shared their views on how they are affected by
Moore & Associates President Bill Moore facilitated a discussion with Sonoco’s Director of Global Mill Supply and Trade Johnny Newsome. Stephane Dube, his vice president of chain supply at Cascades. Bill Said, Greif Group Textile Procurement Director. And Brian Owen, Fiber his manager at Inland Empire Paper Co., said:
“The best factory buyers are what I call ‘supply developers,'” Moore said in his opening remarks. said. “Lowest cost [recycled] In textile mills in North America, people are working on supply development, whatever the price cycle. ”
He added: In a soft market, having the right supply of the right cargo in the right place makes it easier to develop supply and the reward is like an annuity. [rate] Ensuring proper quality will save you quality, cost and freight every year. ”
Conversations focused on the current Old Corrugated Box (OCC) market, where bulk grade prices continue to plummet across the U.S., and the short supply on the sorted office paper side, both of which impact each panelist. is giving
Newsom said Sonoco manages about 2.6 million tons per year across all its facilities, 70 percent of which is made up of OCC. “Our recycling department provides fiber supply security for 13 paper mills with 20 paper machines. [that] We produce 1.5 million tons of paperboard a year,” he said.
According to Dube, Cascades manages approximately 2 million tons of brown grade fiber and 200,000 tons of tissue grade fiber annually. He said the company’s tissue division in particular faces challenges due to the lack of tissue-grade fibers on the market. “The white grades are very expensive and will gradually diminish like snow in the sun,” he said.
Inland Empire Paper uses primarily virgin fiber as its raw material (about 75%), but especially as a newsprint producer, Owen says the company is always looking for ways to innovate. The company purchased its own freight line, which included 22 long-haul trucks, and Owen decided to go into the press room and help install the balers. Once we have it, we load the recycled paper into our trailer and take it home,” he said.
Despite consuming mostly virgin fiber, Owen emphasized the importance of recycled paper for the Inland newspaper printing business. cannot be done, adding: That’s why… we need regenerated fibers. There’s a product, there’s a quality product, and it needs a little more strength. ”
“In our mix we make regular newsprint, but we add 20. [percent] Up to 30% from the recycled side to strengthen the seat. That helped make the newspaper a little bit better than the old one. ”
Theado talked about some of the ways Greif is meeting current supply and demand challenges. This includes working with other factory groups to meet their needs.
“The market is the market,” he said. “Every factory, [we] You have to pay the market price. We work with partners, whether they are independent recyclers or other factory groups.
“Freight is a significant cost to control when there is nothing else really controllable. Sell tons to Johnny, buy some tons from him, we need partners because we have many partners all over the country and our factory consumes about 1.8 million tons a year. Our group has about 3.5 million tons of fiber baskets.”
With many plants in North America reporting full tonnage and unable to move tons, one of the concerns raised by the commission was safety and what steps could be taken to protect those working in facilities with high inventory levels. And if safety measures interfere with operations, the pressure to move supplies increases.
“Obviously the market has changed,” says Theado. “Inventory is everywhere. [recycling] mill or paper mill.
He said Greif has not allowed anyone to enter the bale yard because of the pile up and has been asked to reduce the stock.
“Our paper mill is now at the highest level,” said Mr Theado. “We really, really have to watch how the pyramid stacks up. It’s hard.”
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Dube said Cascades implemented safety alarms to address similar inventory and safety issues. As soon as inventory reaches a certain level, people in the company are notified and the facility’s priority is to move the inventory. “During the past few months, we have had to slow down production or stop until we can move loads,” he said.
On the factory side, Cascades also have safety protocols when inventory reaches maximum levels.
“We have a rigorous process of stacking the bales,” says Dube. “Also, [minimum] and [maximum] As such, staff must manage inventory. … It is almost a contract with the plant manager that the mill buying group will not exceed its maximum capacity. Divert the load or do something else or they will push the truck back. …which is what keeps us in our safe zone in terms of managing that inventory. ”
When it comes to the evolution of the waste paper market since the outbreak of the pandemic, all panelists agreed that one of the biggest changes has been the deterioration and restructuring of industry ties.
“When COVID first started, there was an immediate downturn in business around the world…and one of the reasons Greif recycling processes more tons than our factories consume is that hedges or It’s about having a buffer and pulling in tons of them,” said Theado. He said. “But we also had commitments to trading factories, which caused a lot of supplier and customer damage at the start of COVID. I had to hug many people because of this.
Owen agrees, stating: Whenever we talk about money, we have someone across the table to talk about it. In other words, the big difference was that we relied on technology. ”
While supply has changed significantly between different waste paper grades, so has demand since the start of the pandemic, Dube said. He said Cascades’ containerboard division was “super, super oversold” as e-commerce surged during the COVID-19 shutdown and the company had to turn away customers on the box side of the business. “But what do you think happened with the crisis we are facing?” he said. “This is why prices are down because we are taking downtime. We are not as busy as we used to be. … [There were] There have been many changes in our demand that ultimately have had a big impact. ”
“Right now, what we’re seeing is an artificial launch backlash due to the pandemic, and I think we’re in a very tough market today,” Newsom said.
