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| FORECAST (000 tons) |
| U.S. |
1999e |
1998 |
1997 |
| Production |
15,544 |
15,178 |
15,514 |
| U.S. Capacity |
17,503 |
17,149 |
16,778 |
| Utilization rate, % |
88.8 |
88.5 |
92.5 |
| Imports |
815 |
800 |
700 |
| Exports |
203 |
212 |
213 |
| Apparent consumption |
6,156 |
15,766 |
16,001 |
| lb/capita |
113.8 |
113.9 |
115.2 |
| tons/billion $ real GDP (1992) |
2.07 |
2.09 |
2.20 |
| e=P&P Forecaster estimates. Import data are Census data. Other data AF&PA. |
| TOP N. AMERICAN PRODUCERS |
| Company |
Capacity (000 tons) |
Market share (%) |
| 1.Smurfit-Stone |
2000 |
10.3 |
| 2.Caraustar Ind.1 |
1400 |
7.2 |
| 3.Newark Group |
1340 |
6.9 |
| 4.Rock-Tenn |
1215 |
6.3 |
| 5.Inland Paperboard |
970 |
5.0 |
| 6.Sonoco Products |
934 |
4.8 |
| 7.Weyerhaeuser |
575 |
3.0 |
| 8.Norampac |
571 |
2.9 |
| 9.Pratt Industries |
540 |
2.8 |
| 10.USG |
530 |
2.7 |
| 11.Gaylord Container |
400 |
2.1 |
| 12.Fort James |
320 |
1.7 |
U.S. capacity (1999): 17503Canadian capacity (1999): 1881Capacity Share of top five companies: 35.7%Capacity Share of top ten companies: 52.0%
1.1. Caraustar includes Sprague mill |
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GRADE STRUCTURE. Recycled paperboard is made from a combination of recovered paper stocks that are deinked and re-pulped. The primary stocks used in multi-ply boards are old corrugated containers (OCC), new double-lined kraft corrugated clippings (NDLK), and old newspapers (ONP). Some higher quality stocks may also be used to improve surface appearance. The heavyweight grades of uncoated chipboard are used for pads, partitions, and pressboard products, while higher quality uncoated grades are used for lightweight linerboard, paper cores, and tubes. Premium grades of coated recycled board are used in folding cartons and other custom packaging.
The most important end uses for re-cycled paperboard are folding cartons, corrugated containers, rigid set-up boxes, composite cans, paper tubes and cores, gypsum wallboard facings, solid fiber partitions, book covers and binders, and insulation board. The major end uses measured by industry production capacity are folding cartons (17.9%), corrugating medium (27.6%), linerboard (25.6%), gypsum wallboard (8.8%), and tubes, cores, and other converting grades (20.1%).
PRODUCTION/CAPACITY. Recycled paperboard production in the U.S. has increased rapidly during the past few years, rising from 8.9 million tons in 1990 to 15.5 million tons in 1997—an average annual growth rate of more than 10%. Production of recycled paperboard slipped in 1998 as demand weakened and as competitive grades such as kraft paperboard gained share in folding cartons. Most of the gains in recycled paperboard output have been containerboard, notably linerboard, where production has nearly doubled since 1995. However, competition from other grades, excess capacity, and thus competitive pricing has plagued the industry recently.
According to the American Forest & Paper Assn., new capacity additions slowed to about 2.2% in 1998 and only 2.1% in 1999. The surge in new capacity for recycled linerboard and corrugating medium has accounted for most of the capacity buildup in recent years.
OUTLOOK. The industry is undergoing significant restructuring, as a spate of mergers and asset sales have consolidated market share and led to rationaliza- tion of capacity. The merger of Stone Container and Jefferson Smurfit, for example, merged capacity for the No. 2 and 6 players. As part of this merger, some recycled capacity was also withdrawn. Other structural changes include Caraustar’s purchase of IP’s Sprague mill.
In general, recycled paperboard markets remain highly competitive. In recycled boxboard grades used for folding cartons, kraft folding carton stocks have been gaining some market share, and the overall boxboard sector has seen very competitive pricing during first-half 1999. In containerboard, weak exports and over-capacity plagued the sector last year, and prices plummeted in late 1998. However, by early 1999, containerboard prices were edging upwards as the export market improved and as box shipments jumped. According to Pulp & Paper Forecaster, containerboard prices are expected to gradually improve in second half 1999. Demand remains solid, capacity growth has slowed and some cost push due to fiber costs should lead to some improvement in pricing later in the year. In boxboard grades, markets should improve from recent weak levels, but inter-grade competition and sluggish markets will mean only moderate increases going forward.
Historical prices for 20-pt clay-coated boxboard (rolls, $/short ton, year-end prices): 1990-91, $535; 1992, $500; 1993, $480; 1994, $575; 1995, $610; 1996, $530; 1997, $540; 1998, $510. Bending 20-pt chipboard (rolls, $/short ton, year-end prices): 1990-91, $350; 1992, $370; 1993, $335; 1994, $420; 1995, $440; 1996, $370; 1997, $420; 1998, $375.
By Harold Cody Editorial Director
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