 |
| U.S. Production1 |
2000 |
2001e |
2002e |
| Semichemical |
5,658 |
5,157 |
5,503 |
| Recycled |
3,727 |
3,930 |
4,122 |
| Export |
282 |
309 |
275 |
| Total |
9,667 |
10,085 |
10,296 |
| Semichemical |
6,191 |
6,189 |
6,293 |
| Recycled |
4,681 |
4,629 |
4,672 |
| Total |
10,872 |
10,818 |
10,965 |
| Semichemical |
91.3 |
83.3 |
87.4 |
| Recycled |
79.6 |
84.8 |
88.2 |
| Imports2 |
637 |
663 |
730 |
| Consumption, 000 tons |
9,740 |
9,441 |
10,080 |
| lb/capital |
70.5 |
68.3 |
72.3 |
| GNP ratio* |
1.3 |
.2 |
1.3 |
e=Pulp & Paper Forecaster and Pulp & Paper Week estimates.
1. American Forest & Paper Assn.
2. Primarily from Canada. * Tons/$ billion real GDP (1992). |
| |
Total |
Share% |
| 1. Smurfit-Stone |
1,718 |
14.1 |
| 2. Weyerhaeuser1 |
1,453 |
12.0 |
| 3. Georgia-Pacific2 |
1,160 |
9.6 |
| 4. Packaging Corp. of America |
888 |
7.3 |
| 5. Mead |
850 |
7.0 |
| 6. Norampac3 |
685 |
5.6 |
| 7. International Paper |
575 |
4.7 |
| 8. Greif Brothers |
441 |
3.6 |
| 9. Willamette |
382 |
3.1 |
| 10. Menasha |
275 |
2.2 |
| Total North American capacity (2001): 12,146 |
| Capacity share of top five producers: 49.9% |
| Capacity share of top 10 producers: 69.4% |
1. Includes full medium capacity at joint venture mill in Cedar Rapids, Iowa.
2. Includes Sonoco's 186,000-tpy medium mill capacity.
3. Includes Crown Packaging mill.
4. Does not include Inland Paperboard & Packaging since the 285,000-tpy Newport, Ind., medium mill was converted to gypsum wallboard output in 2000. However, the mill continued to make medium and linerboard through May 2001. |
|
Corrugating medium market slows down because of weak box demand
GRADE STRUCTURE. Corrugating medium, the wavy, middle fluting material in corrugated containers, is made from semichemical pulp and recycled fiber. By definition, semichemical medium can contain up to 25% recycled fiber.
Of total U.S. medium capacity, semichemical medium has declined to 58.5% in 2000 from 79.0% in 1980; recycled medium's share was 41.5%, up from 21.0% in 1980. Basis weights for medium are 16, 18, 22, 26, 31, 33, 36, and 40 lb/1,000 ft. The standard basis weight is 26 lb (56% of medium production in 1998). Producers have moved most aggressively toward making lighter basis weight medium, such as less than 26 lb (with production of 7% in 1998 compared to less than 1% in 1998). Another 20% of medium production was in 33-lb in 1998.
PRODUCTION/CAPACITY. U.S. producers made 9.7 million tons of corrugating medium in 2000, a decrease of 3.9% over 1999 production. The operating rate for production of all medium was 92.6%, down from 97.5% in 1999. In June 2000, Smurfit-Stone Container Corp. (SSCC) shut indefinitely or permanently the 130,000-tpy recycled medium mill in York, Pa., and Inland Paperboard & Packaging converted the 285,000-tpy recycled medium mill in Newport, Ind., to gypsum wallboard production at the end of 2000. (However, due to a weak wallboard market, the mill continued to make medium through mid-2001.) In April 2001, Georgia-Pacific Corp. shut a 240,000-tpy medium machine in Toledo, Ore., for five months, and SSCC indefinitely shut down the 155,000-tpy medium machine at Hodge, La., and the 54,000-tpy medium mill in Carthage, Ind. Almost all the shuts were for market reasons.
U.S. corrugating medium capacity is expected to grow at just 1% annually from 2001 through 2003, according to the American Forest & Paper Assn. From 2001 to 2003, an additional 258,000 tons of capacity was expected to be added to the U.S. medium market, with the only new medium machine coming from Solvay Paperboard LLC. Solvay plans a 180,000-tpy Valmet machine for start in the summer of 2002 at its mill in Syracuse, N.Y.
OUTLOOK. Prices for corrugating medium in the U.S. increased four times in 13 months through March 2000. But the slowdown in the U.S. economy that hit the manufacturing sector in October impacted medium and linerboard prices. Pricing for 26-lb semichemical medium fell five times and a total of $55/ton from August 2000 through May 2001 in the Eastern U.S. to reach $400-$410/ton.
By May 2001, $55/ton of the $60/ton increase on semichemical medium in February/March 2000 had been lost. U.S. box demand declined on an average week basis by 6% between October 2000 and April 2001, illustrating the slowdown in the business and softness on pricing.
U.S. box shipments totaled 401.3 billion ft2 in 2000, down 1%. Through April 2001, U.S. medium production was down 8%, with semichemical production down 11% and recycled medium production down 5% (compared to production through April 2000). Exports of U.S. medium through April were up 6%. Recycled medium producers in mid-2001 benefitted from the lowest prices in two years for old corrugated containers and new double-lined corrugated clippings.
PRICES. Prices for 26-lb semichemical medium increased in February/March 2000 to $455-$465/ton in the U.S. In August and September 2000, semichemical prices fell $15/ton. In January, the prices took their deepest one-month fall: $20/ton. In both April and May, the prices fell again by $10/ton each month.
Since 1994, the average price for 26-lb semichemical medium has been $360/ton in 1994, $495/ton in 1995, $313/ton in 1996, $272/ton in 1997, $315/ton in 1998, $360/ton in 1999, and $446/ton in 2000.
by GREG RUDDER,
Executive News Editor
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