Paper360 - May/June 2017 - 47

INNOVATE
STRONG
in the US, and most likely higher linerboard
and medium production, as well as a higher
share of OCC in the furnish. It also means less
OCC available for exports, fewer imports of
goods from Asia, and fewer empty containers available for cheap transport of OCC back
into Asia. This has been a major competitive
advantage for Chinese mills.
OCC AND OTHER GRADES
Newspapers and magazines are rapidly
declining across the world, and office papers
are not growing either. These have been
an important source of recovered paper
for recycled cartonboard producers. In the
future, some of these volumes will need to
be substituted by OCC, adding to the competition. Liner, medium, and corrugated box
consumption is still growing rapidly in Asia, so
more volume becomes available every year for
collection. However, the population is aging,
especially in the more developed countries
such as Japan, South Korea, and Singapore,
but also in China, Hong Kong, and Taiwan.
An older population tends to consume less.
However, family sizes are getting smaller and
that means more packaging. Also, online shopping is growing rapidly in Asia, again helping
to underpin consumption growth.
At the same time, the paper industry is growing in other fiber-poor regions, such as the
Middle East and Africa. They need to develop
their collection systems to meet the demand,
but it is likely that they will also increasingly
take part in the global OCC market. In the US,
Europe, and Japan, box consumption grows
slowly, so more needs to be collected from the
existing volume. There is still room for the
collection rate in the US to increase; however,
additional tons will be more difficult to collect
and the material will be lower quality and less
clean with more impurities and other papers
mixed in. Transport costs will also go up. The

easiest tons have already been collected from
big megastores like Walmart and Costco where
clean boxes are collected daily and baled immediately. When you go to small towns and households to get the last remaining tons, it quickly
gets expensive, and the boxes have often been
reused or stored in poor conditions. In Japan,
South Korea, and most of Europe, collection
rates are already high, so very little more can
be collected.
Single stream collection is increasing
because it is a cheaper way to collect waste.
This will support the growing trend in wasteto-energy, where plastic mixed with paper
only adds to the heat value. This will limit the
availability of OCC, especially more marginal
household and rural volumes.
As a result of all these developments, the
long-term trend price of OCC has been going
up for the past 20 years already, and it will continue to rise. There will be short-term declines
due to economic developments, new mills or
closures that affect the regional balance. But
the overall trend will be up. Higher prices will
lead to more closures, but also to efficiency
improvements, mergers, and maybe even new
investments closer to the source of OCC, such
as in the US.
The world is not going to run out of OCC. Yet
when consumption grows faster than supply,
it implies shortage and the price will increase,
reducing demand. This will bring the world
into temporary balance again, at a higher price
level-and then the cycle will start again.
Fisher International
closely follows the
paper and related industries, providing support for data-driven decision-making and strategy consulting to the industry and its players.
Ilkka Kuusisto is vice president, Asia at Fisher
International, based in Singapore. Kuusisto can
be contacted at ikuusisto@fisheri.com.

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Table of Contents for the Digital Edition of Paper360 - May/June 2017

Setpoint
Over the Wire
Leadership for a Changing Industry
An Ode to Small
The Graying of the Paper Industry
Suppliers Reach Out to Mill Leaders
Making a Difference: 2017 TAPPI/PIMA Awards
RISI’s Asian CEO of the Year
TAPPISAFE Offers Solid Benefits for Mills, Contractors
Reinventing Varkaus
Failure Isn’t Just an Option—It’s Unavoidable
Blower Technology Proves Its Worth
TAPPI Journal Summaries
Global Study: Most People Highly Value Paper and Print
The Changing World of OCC
TAPPI News
ASPI News
Index of Advertisers
Paper360 - May/June 2017 - intro
Paper360 - May/June 2017 - ebelly1
Paper360 - May/June 2017 - ebelly2
Paper360 - May/June 2017 - cover1
Paper360 - May/June 2017 - cover2
Paper360 - May/June 2017 - 3
Paper360 - May/June 2017 - 4
Paper360 - May/June 2017 - 5
Paper360 - May/June 2017 - Setpoint
Paper360 - May/June 2017 - 7
Paper360 - May/June 2017 - Over the Wire
Paper360 - May/June 2017 - 9
Paper360 - May/June 2017 - 10
Paper360 - May/June 2017 - 11
Paper360 - May/June 2017 - An Ode to Small
Paper360 - May/June 2017 - 13
Paper360 - May/June 2017 - 14
Paper360 - May/June 2017 - 15
Paper360 - May/June 2017 - The Graying of the Paper Industry
Paper360 - May/June 2017 - 17
Paper360 - May/June 2017 - Suppliers Reach Out to Mill Leaders
Paper360 - May/June 2017 - 19
Paper360 - May/June 2017 - Making a Difference: 2017 TAPPI/PIMA Awards
Paper360 - May/June 2017 - 21
Paper360 - May/June 2017 - 22
Paper360 - May/June 2017 - 23
Paper360 - May/June 2017 - 24
Paper360 - May/June 2017 - 25
Paper360 - May/June 2017 - 26
Paper360 - May/June 2017 - 27
Paper360 - May/June 2017 - RISI’s Asian CEO of the Year
Paper360 - May/June 2017 - 29
Paper360 - May/June 2017 - 30
Paper360 - May/June 2017 - 31
Paper360 - May/June 2017 - TAPPISAFE Offers Solid Benefits for Mills, Contractors
Paper360 - May/June 2017 - 33
Paper360 - May/June 2017 - Reinventing Varkaus
Paper360 - May/June 2017 - 35
Paper360 - May/June 2017 - Failure Isn’t Just an Option—It’s Unavoidable
Paper360 - May/June 2017 - 37
Paper360 - May/June 2017 - Blower Technology Proves Its Worth
Paper360 - May/June 2017 - 39
Paper360 - May/June 2017 - TAPPI Journal Summaries
Paper360 - May/June 2017 - 41
Paper360 - May/June 2017 - Global Study: Most People Highly Value Paper and Print
Paper360 - May/June 2017 - 43
Paper360 - May/June 2017 - 44
Paper360 - May/June 2017 - 45
Paper360 - May/June 2017 - The Changing World of OCC
Paper360 - May/June 2017 - 47
Paper360 - May/June 2017 - TAPPI News
Paper360 - May/June 2017 - ASPI News
Paper360 - May/June 2017 - Index of Advertisers
Paper360 - May/June 2017 - cover3
Paper360 - May/June 2017 - cover4
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