More than 130 paper recycling executives convened in New Orleans last week to consider how to possibly rejigger bale specifications to better reflect current market conditions.
The fiber collected and processed today varies widely from past years, when current specifications were adopted. The two-day work session was sponsored by the Paper Stock Institutes, a chapter of the Institute of Scrap Recycling Industries. ISRI estimates its current recovered paper specs are used in the trading of more than 50 million tons per year of recyclable paper, including bales sent to buyers in 85 other countries. This fiber is worth nearly $8 billion.
The PSI specifications committee generated five draft spec changes that were presented in New Orleans. This included four new grades and the revision of one current specification. If these are approved, six current specifications would be deleted. The draft changes are summarized at the bottom of this article.
Sandy Rosen, the outgoing PSI chair, noted that “specs have long needed attention.” He stressed the need for the industry to adopt specifications so better quality material will get a better price. He did say spec changes are “an emotionally-charged process.” Rosen is CEO of Roseville, Mich.-headquartered Great Lakes Recycling.
Some industry members feel this push to new specifications, especially for old corrugated containers (OCC), is being driven by specific fiber consumers. Myles Cohen, president of Conyers, Ga.-headquartered Pratt Industries, one of the largest consumers of recovered paper in the U.S., told the attendees this was not the case. He pointed out the draft specifications are the result of spirited discussion among many parties, and as a result, the draft specs represent a consensus view.
Kari Talvola is chair of the specifications committee and an export trader at Burlingame, Calif.-based Fibre Trade. The other committee members are Johnny Gold, an industry veteran representing the American Forest & Paper Association; Keith Ristau, Portland, Ore.-based Far West Recycling; and Shawn State, Pratt Industries.
The specifications debate raised many issues. If a new specification received a slim majority vote of the PSI membership, is that an acceptable and useful result, given that a sizable number of industry executives disapprove of the grade? Wouldn’t a higher level of approval (say 80 percent of the votes) be a better indication of the need for a new grade? Sandy Rosen said the committee is looking for a significant support for a specification in order for it to be advanced to ISRI’s leadership for possible final approval.
The greatest concern expressed by PSI members was about the need for a new grade for old corrugated containers (OCC) and interconnected change to the existing OCC grade. The debate centered on the conflict, as Don Majka, vice-president of commodity sales for Houston-based Waste Management, pointed out, between “buy side” views and “sell side” opinions. In general, a few mills, such as Pratt Industries, would like to have a new OCC grade and an altered existing OCC grade, while many processors dislike the idea. Bales meeting the new grade would likely be priced between standard OCC and mixed paper.
For the change to the existing OCC grade (No. 11), much of the focus was on OCC generated from distribution and retail facilities operated by firms such as Dollar Tree, Toys ‘R Us and Walmart, where goods are unloaded from foreign-made boxes, which typically have shorter fibers than domestic-made containers. But operators of paper packing plants and materials recovery facilities described how hard it would be to produce bales meeting the standards of the revised OCC grade which would require bales to consist of less than 30 percent of boxes made offshore. And not all mills wanted to see a change in OCC grades, with consumers such as Caraustar saying they see no need for rewriting specs.
After long debate, both formally in the meeting room and informally outside the session, each member firm cast its vote. The draft specifications for sorted clean newspaper, sorted residential paper and mixed paper were approved by margins ranging from 73 to 90 percent. As a result, the alteration of grade numbers was also widely approved.
The idea of adding a new OCC grade and also amending the current specification failed to move forward, with both ideas getting little support.
Recommended specification changes
- Newspaper grades Nos. 6, 7 and 8.
- Mixed-paper grades Nos. 1, 2, and 3.
- The current specification for old corrugated containers would be amended to limit the amount of corrugated boxes made offshore to 30 percent of the bale.
- Sorted clean newspaper would consist of fiber generated by source-separate collection (paper drives, drop-off centers, paper converters, etc.).
- Sorted residential paper would consist of newspaper, printing and writing paper, magazines and other paper collected from households and processed at a recovery facility.
- The new definition of mixed paper says this grade is all paper and paperboard (not limited by fiber content) and sorted at a processing center.
- Old corrugated container (labeled “B” grade) consists of corrugated paperboard and other brown grades sorted from fiber collected typically but not limited to residential programs.