Higher prices for recycled paper lead to mill closures
- Resolute Forest Products recently announced plans to indefinitely idle a paper mill in Ontario that used 100% recycled content, as reported by Resource Recycling. The company cited "ongoing significant decline in North American newsprint consumption, coupled with the increasing cost of recovered paper" as the two main factors behind this decision.
- The facility had been idle since December and more than 100 workers have now been laid off. Resolute is working with Stone House Investments Holdings to potentially convert the mill to produce kraft paper instead.
- Resolute's only other mill that used all-recycled content, located in South Korea, will also be closing. The company invested $10 million in the facility back in 2014, but cited rising recycled fiber prices and increased competition in Asia as competing factors.
Newsprint consumption has been on an almost uninterrupted decline for years as lower advertising revenues shrink the existing newspaper market and many of those that are left now see greater interest in digital from their readers. Since 2007, the percentage of newspaper in the recycled fiber stream has shrunk to about a third of its original share.
The situation has become dire enough that a federal check-off program — traditionally used for commodity crops — was established in 2014 to boost paper consumption in the U.S. Supported by the industry, the Paper and Packaging Board has an estimated $25 million annual budget centered largely around advertising campaigns.
At the same time, increased interest in online shopping has been a boon for corrugated cardboard manufacturers and recovery rates for paper and paperboard reached a record high of 66.8% in 2015. Finding ways to make this material a viable feedstock for mills that want to specialize in recycled content is a priority and industry groups have also been seeking relief through tax reform and "smarter" regulations.
- Resource Recycling Recovered paper prices prompt mill closures
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