1 U.S. Recovered Paper Markets Presented By Stan Lancey Chief Economist American Forest & Paper Association To The Municipal Waste Management Association Lexington, KY October 21, 2004

2 Total U.S. Paper Recovery Millions of tons Up 88% since 1988 Up 4% since 2000

3 Key U.S. Recycling Metrics Paper consumed in U.S.—98.0 million tons Paper recovered for recycling—49.3 million tons Recovery rate (49.3/98.0)= 50.3% Recovered paper consumed in U.S. mills– 33.7 million. Total fiber consumed in U.S. mills—91.7 million tons. Recovered paper’s share of total fiber consumed (33.7/91.7)=37%

4 Recovered Paper Highlights Recovery rate has increased from 30.5% in 1988 to 50.3% in Recovered paper’s share of industry fiber pie has increased from 25.0% In 1988 to 37.0% in (see chart 18 for details.) 2003 End Uses:

5 Recovery of Selected MSW Materials * Million tons Source: EPA * Data pertain to 2001 According to the EPA’s Characterization of the Waste Stream, paper accounts for 54% of MSW recovery, with the next biggest category being yard waste at 23%. Paper recovery dwarfs the other industrial materials. It’s six times larger than all metals combined and 26 times larger than plastics.

6 “Rapidly growing demand for recovered paper exports…will bring pressure on domestic users of recovered paper.” (Source: Recovered Paper – Future Challenges And Opportunities by Franklin Associates, July 2002, Page ES12.) “The volumes of recovered paper traded internationally will grow significantly. North America’s export surplus will need to grow from 11.3 million tons in 2003 to 18.5 million tons by 2010.”( Source: EU Consulting, Germany and Moore & Associates, U.S., 2004)

7 U.S. Exports of Recovered Paper Source: U.S. Census Bureau* Annualized data through June +3.3% +22% Exports have grown 85% since 1997

8 Exports As % of U.S. Paper Recovery % 27%

9 U.S. Recovered Paper Exports To China Source: U.S. Census Bureau Million short tons * Annualized data through April

10 China’s Share of U.S. Recovered Paper Exports % Source: U.S. Census Bureau Data 47% 12% China’s share of U.S. recovered paper exports has increased sharply during recent years and will probably top the 50% mark by %

11 Chinese Recovered Paper Imports Million tons

12 China’s Recovered Paper Imports by Region/Country Source: China Customs

13 U.S. Recovered Paper Exports by Destination* Million tons * 2003 data

14 Major Export Categories * Million short tons *Based on 2003 Bureau of the Census data

15 U.S. Paper & Paperboard Production Millions of Tons per Annum Source: AF&PA

16 OCC and ONP May Be Approaching Maximum Recovery Recovery Rates Old Corrugated Containers48.6%75.8% Old Newspapers32.7%73.4% Office Papers19.9%48.3% Printing-Writing Papers22.5%39.4% Total Paper & Paperboard28.8%50.3% Source: 1998 and 2003 Recovered Paper Statistical Highlights, American Forest & Paper Association.

17 Possible Impact of Single Stream on Paper Recycling Value Chain $ per ton Source: JPC/SERA