Profit decline, business closures, waste paper trade market reconstruction, what will happen to the carton industry
A number of paper groups around the world reported factory closures or substantial shutdowns in the first quarter of this year, as financial results reflected lower packaging demand. In April, ND Paper, the U.S. arm of Chinese containerboard maker Nine Dragons Holdings, said it was reassessing business development at two mills, including a kraft pulp mill in Old Town, Maine, that produces 73,000 tons of recycled Commercial pulp, which mainly uses old corrugated container (OCC) as the main raw material every year, and this is only the first step announced this spring.poirot the chocolate box
Large groups such as American Packaging, International Paper, Wishlock, and Graphic Packaging International followed suit, issuing various announcements ranging from closing factories to extending the downtime of paper machines. “Demand in the packaging segment was below our expectations for the quarter,” U.S. Packaging President and CEO Mark W. Kowlzan said on an April earnings call. “Consumer spending continues to be negatively impacted by higher interest rates and persistent inflation. effects, and consumers’ preference for buying services over durable and nondurable goods.small chocolate gift boxes
American Packaging, based in Lake Forest, Illinois, reported a 25% year-over-year decline in net earnings and a 12.7% drop in packaging board shipments from a year earlier, before announcing plans on May 12 to relocate its Walu, Wash.-based The La plant is idled until later this year. The factory produces about 1,800 tons of virgin paper and corrugated base paper per day and consumes nearly 1,000 tons of OCC per day.valentine box of chocolates
Memphis, Tennessee-based International Paper cut production by 421,000 tons of paper in the first quarter for economic rather than maintenance reasons, down from 532,000 tons in the fourth quarter of 2022 but still the company’s third consecutive quarterly decline. shutdown. International Paper consumes about 5 million tons of recovered paper annually globally, including 1 million tons of OCC and mixed white paper, which it processes at its 16 U.S. recycling facilities.a box of chocolates forrest gump
Atlanta-based Wishlock, which consumes about 5 million tons of recovered paper a year, posted a net loss of $2 billion, including 265,000 tons of downtime due to economic problems, but the second quarter (ended March 31, 2023) ), which had a solid performance, said its corrugated packaging unit had a $30 million negative impact on adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).best box chocolate cake recipe
Wishlock has closed or plans to close several plants in its network. Most recently, it announced the closure of its containerboard and uncoated kraft mills in North Charleston, South Carolina, but in the last year it also closed a containerboard mill in Panama City, Florida, and one in St. Paul, Minnesota. Corrugated paper business for recycled paper mills.
Atlanta-based Graphic Packaging International, which consumed 1.4 million tons of waste paper last year as part of an ongoing plant network optimization strategy, said in early May that it would close its Tama, Iowa, facility earlier than previously expected. Coated recycled cardboard factory.box lindt chocolate
OCC prices continued to rise despite lower production, but were still 66% below last year’s average price of $121 per ton at this time, while mixed paper prices were down 85% from a year ago. According to the May 5 issue of Fastmarkets RISI’s Pulp and Paper Weekly, the US average price is $68 per ton. Lower volumes led to higher prices for DLK, which rose by at least $5 per ton in five of the seven regions as carton factory production slowed.boxed chocolate gifts
On a global scale, the outlook is not much better. In the Brussels-based Bureau of International Recycling (BIR)’s quarterly recovered paper report, Spain-based Dolaf Servicios Verdes SL and Francisco Donoso, president of BIR’s paper division, said demand for OCC was low “worldwide”.chocolate box cake recipes
Asia as a continent is still the world’s largest waste paper producing area, reaching 120 million tons in 2021, equivalent to nearly 50% of the world’s total output. While Asia remains the world’s leading importer of recovered paper and North America its largest exporter, there has been a necessary and substantial shift in trade since China banned most recovered paper imports in 2021.chocolate ice box cake
“Fewer exports from China and other Asian countries to Europe and the U.S. mean packaging production is falling, so OCC demand and prices are weaker,” he said. “In the U.S., inventories are very low in all regions, including paper mills. and recycling bins, because lower recycling volumes are actually consistent with a reduction in global demand.”
Demand for fine paper is even worse than OCC, Donoso said. “The tissue market is not strong at all, so the demand for raw materials is really low.” His observations are also reflected in the US market. Sorted Office Paper (SOP) prices have been falling steadily since last fall, with SOP pricing down $15 per ton across the U.S. and lowest in the Pacific Northwest, according to RISI’s latest pricing index.chocolate variety box
John Atehortua, regional trade manager of CellMark in the Netherlands, said that China’s import ban has forced a “change of mentality” for US OCC exporters, who now “have to be more proactive in finding customers in Asia”. Judging by the fact that China absorbed more than 50% of U.S. OCC exports in 2016, by 2022 more than half of goods originating in the U.S. will be shipped to three Asian destinations—India, Thailand, and Indonesia.
Simone Scaramuzzi, commercial director of Italy-based LCI Lavorazione Carta Riciclata Italiana Srl, commented on the same trend in waste paper shipments from Europe to Asia following the import ban in China. The ban has spurred investment in wastepaper plants in Europe and other Asian countries and has led to changes in transport services and prices, Scaramuzzi said. Other reasons why the European recovered paper market “has changed dramatically over the past four or five years” include the COVID-19 pandemic and rising energy costs.
According to the data, Europe’s waste paper exports to China dropped from 5.9 million tons in 2016 to only 700,000 tons in 2020. In 2022, the main Asian buyers of European recovered paper are Indonesia (1.27 million tons), India (1.03 million tons) and Turkey (680,000 tons). Although China was not on the list last year, total shipments from Europe to Asia in 2022 will increase by about 12% year-on-year to 4.9 million tons.
With regard to the capacity development of recovered paper plants, new facilities are being built in Asia, while Europe is mainly converting machines in existing plants from graphic paper production to packaging paper production. Nonetheless, Scaramuzzi said Europe still needs to export recovered paper to maintain a balance between recovered paper production and demand.
Post time: Jun-27-2023