EPA/530/SW-132
TRENDS IN WASTEPAPER EXPORTS
AND
THEIR EFFECTS ON DOMESTIC MARKETS
U.S. ENVIRONMENTAL PROTECTION AGENCY
-------
TRENDS IN WASTEPAPER EXPORTS
AND
THEIR EFFECTS ON DOMESTIC MARKETS
This report (SW-132) was written
by FRED L. SMITH, JR.
U.S. ENVIRONMENTAL PROTECTION AGENCY
1974
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TRENDS IN WASTEPAPER EXPORTS
AND
THEIR EFFECTS ON DOMESTIC MARKETS
Fred L. Smith, Jr.*
This paper examines the role that exports have played in the overall
U.S. wastepaper market, emphasizing the significant export increases
that occurred in 1973. The first section reviews the historic pattern
of exports in the context of domestic wastepaper consumption. Then the
changes in export patterns that occurred in 1973 are examined, as well
as the extent to which these changes were responsible for the dramatic
shifts in wastepaper supplies and prices that occurred in the nation and
expecially in one region, the West Coast.
Summary
Exports of wastepaper have historically represented a small proportion
of total wastepaper recovery in this country. The percentage has gradually
increased, however, from less than 2 percent in the early fifties to 5.1
percent in 1973. Though exports have generally trended upward, this
growth has been erratic. Export tonnages have fluctuated significantly
from year to year. For example, although the wastepaper exports were
essentially the same in 1962 and 1951, the average annual change in the
interim was 25 percent.
In 1973 wastepaper exports increased a dramatic 65 percent, after
remaining essentially unchanged for the previous 3 years. This increase
represented about 20 percent of the total increase in U.S. wastepaper
recovery in 1973. Seventy percent of the total export increase was
shipped from West Coast ports, and almost half of this amount was waste
newsprint (news), so the export increases clearly affected one region
and one wastepaper grade most heavily. Despite this, the price increases
and supply shortfalls reported for waste news on the West Coast were
less critical than those in other regions, such as the North Central and
Northeast. One reason why exports failed to affect prices and supplies
in the West as much as expected is that regional wastepaper recovery in
this area, including exports, is lower in relation to population than in
any other region in the nation.
*Mr. Smith is an Operations Research Analyst in the Resource
Recovery Division of EPA's Solid Waste Management Programs.
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While exports were a significant factor in West Coast markets in
1973, accounting for 16 percent of total recovery in that region, in
other regions they were a relatively minor factor in overall recovery.
In 1973, exports comprised only 1.6 to 2.6 percent of total wastepaper
recovery in the Northeast, North Central, and South Atlantic regions.
A large proportion of West Coast domestic wastepaper consumption
(50 percent) is waste news. Since the export increase in 1973 was also
largely in waste news, many wastepaper users feared a supply shortage in
that grade. The supply system, however, appeared to be responsive to
increased demand. The data indicate that recovery of newspapers discarded
from West Coast homes and offices (postconsumer waste news) increased
from 16.0 to 29.6 percent from 1972 to 1973. These results suggest that
in 1973 exports had a significant impact on increasing the recycling
rate of wastepaper on the West Coast.
Historic Export Patterns
National Perspective. Absolute levels of U.S. wastepaper consumption
have increased gradually since 1950 (Table 1). In terms of total tonnage,
domestic consumption has consistently increased, slowly through the
sixties and then more rapidly in the seventies. During this same period,
wastepaper exports increased slowly but erratically, with relatively
large jumps occurring in 1970 and then again in 1973. As a percentage
of total U.S. wastepaper recovery, exports remained relatively constant
through the sixties but increased during the last 4 years. Over the 24
years from 1950 through 1973, exports have ranged from a low of 1.5
percent to a high of 5.3 percent of total U.S. recovery, with the high
occurring in 1973.
Regional Perspectives. To provide a more detailed perspective on
export patterns, it is necessary to consider which regions of this
nation are sources for wastepaper exports and which countries purchase
this raw material (Table 2). The source regions are the Northwest,
California, the Southwest, the Gulf, the South Atlantic, the Northeast,
the North Central, and Hawaii (Figure 1). During the last 4 years, the
regional pattern of exports shifted appreciably. Exports to Canada more
than doubled, for example, while exports to Central America and some
Asian countries decreased by over 70 percent. Thus the North Central
region increased its exports significantly while the Southwest sharply
decreased its exports.
As noted earlier, total U.S. wastepaper exports in 1973 increased
significantly. This increase was accompanied by important shifts in the
export pattern. Korean imports surged and there were significant
increases in imports by Japan and Taiwan. Generally, a country's imports
were provided by the closest U.S. port, and therefore most of the increase
was supplied by the West Coast. However these Asian nations still
received over 20 percent of their imports from other regions during the
1970-73 period.
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3
TABLE 1
DOMESTIC CONSUMPTION AND EXPORTS
OF WASTEPAPER, 1950-73
(IN THOUSANDS OF TONS)
Year
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
Exports
120
206
142
114
126
167
190
131
107
128
153
215
209
230
272
292
246
262
253
289
408
418
413
683
Domestic
* consumption+
7,596
9,070
7,881
8,531
7,857
9,041
8,836
8,493
8,671
9,414
9,032
9,018
9,075
9,613
9,843
10,231
10,564
9,888
10,222
10,939
10,594
11,000
11,703
12,656
Total
recovery^
7,716
9,276
8,023
8,645
7,983
9,208
9,026
8,624
8,778
9,542
9,185
9,233
9,284
9,843
10,115
10,523
10,810
10,150
10,475
11.228
11,002
11,418
12,116
13,339
Exports as
percent of
recovery
1.6
2.2
1.8
1.3
1.6
1.8
2.1
1.5
1.2
1.3
1.7
2.3
2.3
2.3
2.7
2.8
2.3
2.6
2.4
2.6
3.7
3.7
3.4
5.1
*U.S. Bureau of the Census. U.S. exports—domestic merchandise;
/series/ EM-522, sect. 2 (schedule B setc.). (Distributed by National
Technical Information Service, Springfield, VA.)
+Statistics of paper. New York, American Paper Institute, 1964
and 1973.
^Preliminary Department of Commerce estimate, adjusted by EPA
to reflect normal difference between preliminary and adjusted Commerce
estimates.
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4
TABLE 2
U.S. WASTEPAPER EXPORTS BY REGION MJD IMPORTING COUNTRY, 1970-73*
Exporting
Region
North
Central
Northeast
Coast
South
Atlantic
Gulf *
Southwest
Calif.
Northwest
Hawaii
Total
Inports
by
Country
Year
Canada
1970 58,885
1971 130,324
1972 138,319
1973 139,177
1970 2341
1971 3418
1972 6747
1973 3700
1970
1971
1972
1973
1970
1971
1972
1973
1970
1971
1972
1973
1970
1971
1972
1973 418
1970 2155
1971 455
1972 1174
1973 8884
1970
1971
1972
1973
1970 63,381
1971 134,187
1972 146,240
1973 152,179
Importing Country
Central South Italy
America America
436
145 4101 23,969
1024 4998 17,418
332 5324 14,557
278 7956 26,146
7705 16,910
6308 14,446
1594 15,400
3433 19,677
2793 37,424 7014
2230 50,862 1243
1807 57,862 4600
3420 44^,048 2261
61,732
33,159
13,379
46,825
3323 630
13
137
64,670 52,690 48,523
36,413 62,081 33,107
15,531 65,216 34,557
50,523 55,437 48,084
Other
Europe*
138
11
3155
1421
887
1719
238
2358
3464
3942
2360
2170
2868
1401
128
27
6019
5960
7246
7062
Korea
1581
11,471
319
2007
1856
50
130
730
10,562
14 , 701
17,892
98,941
3263
4503
6678
15,361
373
201
60
16,148
21,412
24,700
128,419
Japan
700
1031
604
10,223
1227
450
1845
3686
5830
2431
2526
8706
60,739
47,617
55,851
125,542
17,684
24 , 328
18,466
24,862
816
4122
5285
6408
86,996
79,979
84,577
179,427
Taiwan
216
111
202
3389
2280
4018
2978
3299
6215
7638
8469
5807
5268
5290
6605
21,716
1405
1160
1250
1019
652
15,384
18,217
19,504
35,882
Other
Asia*
120
1784
2100
3950
5436
199
264
18
132
3101
823
463
77
31,565
18,248
9122
12,893
2150
2988
388
1299
7676
2283
1679
3185
46,475
26,706
15,620
23,142
Total
exports by
region
59,023
130,335
138,755
139,297
37,992
31.521
32,603
70,318
28,878
29,851
25,299
36,025
64,787
67,310
73,725
66,450
61,732
33,159
13,379
46,825
112,215
85,856
89,510
259,510
26,794
33,424
27,956
51,425
8865
6606
6982
10,305
*EPA calculations based on U.S. Bureau of the Census. U.S. exports, series EM-522.
+Israel included.
^Mozambique and Australia included.
/Includes noncoastal ports of Buffalo, N.Y., and St. Albans, Vt. (Figure 1).
^Includes Miami and Tampa, Fla., and San Juan, P.R. (Figure 1).
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Figure 1.
Hawaii.
The mip shews the U.S. main regions from which wastepaper is exported. It is also exported from
-------
Overall, exports have remained a relatively small though growing
share of total U.S. wastepaper recovery. They have shown an erratic
pattern of general growth and an even more erratic pattern of change by
importing country and by U.S. port of export. A trend projection based
on exports in a one- or two-year period would be a poor guide to the
future.
Exports by Grade. Only on the West Coast has there been any effort
to breakdown the data on wastepaper export tonnages by grade. This
attempt was triggered by the concern of several West Coast wastepaper
consumers that exports were disrupting the normal markets for wastepaper,
and in particular for waste news. To support this contention, estimates
were made of the news fraction of imports by countries importing from
the West Coast. Separate estimates were made by McKinsey and Company, Inc.,
Department of Commerce, and EPA. Although these estimates vary widely,
they do indicate that news is a very substantial fraction of all West
Coast wastepaper exports, especially to Korea and Taiwan (Table 3).
Based on this data, the fraction of waste news for each nation, was
set by the author as follows: Japan, 15 percent; Korea, 75 percent;
Taiwan, 50 percent; and other Asian countries, 50 percent. To calculate
the tonnage of waste news exported from the West Coast, these percentages
are applied to the tonnages exported in 1973 (Table 2). The resulting
estimate is that a total of 127,000 tons of waste news was exported from
the West Coast to Asian countries. This would amount to 40 percent of
total Asian imports of wastepaper from the West Coast (310,000 tons).
Assuming that news fraction of exports to each country suggested above
also held in 1972, waste news would have comprised 38,000 of the 116,000
tons of wastepaper exported to Asia from the West Coast in that year.
These estimates indicate that wastepaper exports from the West Coast
in 1973 were heavily oriented news. This contrasts with the long-held
view that wastepaper exports consist largely of old-corrugated and
various high-grade wastepapers. For example, a representative of the
Container Corporation of America stated that 1970 exports were about 65
percent medium-priced long-fibered kraft grades (corrugated) and 35
percent pulp substitutes.* Also, the Pacific Westbound Conference, in a
reply to an interrogatory by U.S. Environmental Protection Agency
(dated April 22, 1972), reported on the grade mix transported by their
conference members from various ports. They estimated that waste news
comprised 20 percent of the exports from Los Angeles, 9 percent of
exports from San Francisco, and only 1 percent of the exports from Puget
Sound—an average of 13 percent of all West Coast exports. The apparent
shift in 1973 to old news occurred because the countries increasing
their share of the market, particularly Korea and Taiwan, import a
higher fraction of waste news than our older trading partners.
*Wastepaper recycling. New York, Joseph E. Atchison Consultants, Inc.,
December 1972, p. 102.
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TABLE 3
ESTIMATES OF THE MIX OF WASTEPAPER EXPORTS TO ASIAN COUNTRIES
(Percentages)
News
Corrugated
High Grades
JAPAN
McKinsey* Commerce + Exporters
25 13 10-15
75
75 87
15-10
KOREA
McKinsey Commerce Exporters
75 70 75-80
25 30 25-20
TAIWAN
McKinsey Commerce Exporters
75 5 50
50
25 95
nil
OTHER ASIAN
McKinsey Commerce Exporters
43 N/A N/A
N/A
57 N/A
N/A
'Sources: The McKinsey estimates appear in reports prepared by McKinsey & Company, Inc., of Los Angeles for the Garden State Paper
Company ("Analyzing the Supply/Demand Conditions in the Southern California Used Newspaper Market," August 1973, 34 p.; and "Recent
Developments in the Southern California Used Newspaper Market," November 1973, 8 p.), as well as in a report by International Labor
Press et al., "Waste Newspapers; Analysis of Supply/Demand/Price Relationships Resulting from Excessive Foreign Demand," Arlington, Va.,
Media General, Inc., January 15, 1974, 18 p. (An export control petition to the Secretary of Commerce.)
+The U.S. Department of Commerce estimates were obtained by EPA from discussions with Departmental staff. Their estimates, in turn,
were based largely upon U.S. State Department data.
The exporter estimates were obtained by EPA via telephone interviews with two major exporters.
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Export Prices. A domestic wastepaper price index is compiled by
the Bureau of Labor Statistics; unfortunately there is no comparable
series for export prices, but since all wastepaper exports are reported
in both tonnage and total dollar value terms, it is possible to calculate
an implied unit export price (average price per ton).* Such a series
has been prepared by EPA, then reexpressed in index form to correspond
to the domestic price index (Table 4). The resulting trends when plotted
show that although domestic and export prices have both fluctuated
widely, the series do seem to move in parallel after 1963, although the
export highs and lows apparently lag behind their domestic counterparts
(Figure 2). A traditional economic argument would suggest just such a
similarity in price trends. It does not imply that export prices cause
domestic prices to rise nor the converse, but rather that prices result
from the interaction of domestic and foreign demand with domestic
supply. Price increases may result from one or all of the following
factors: increased exports, increased domestic demand, and increased
supply 'costs.
Impact of 1973 Export Increases on Domestic Markets
Domestic as well as foreign demand for wastepaper increased
significantly in 1973 (Table 5). Total wastepaper exports in that year
increased by 268,000 tons, whereas domestic consumption increased an
estimated 965,000 tons,* for a total increase in wastepaper recovery of
1,233,000 tons. Exports made up about 22 percent of this total increase,
even though they still represented less than 6 percent of total U.S.
wastepaper recovery.
Export increased, both in absolute tonnage and in relation to
domestic consumption increases, had the most important influence on the
West Coast (Table 5). In this region exports comprised 71 percent of
the total increase in wastepaper recovery, while in other regions
exports did not exceed 20 percent of recovery increases. Thus, exports
would be expected to have their major impact in the West Coast market,
though other regional markets were undoubtedly influenced by exports as
well. In fact wastepaper prices on the West Coast did rise rapidly in
1973. For example, the price for old news in Los Angeles (as reported
in Official Board Markets was cited at $16 to $19 per ton in December
1972, and rose to $31 to $34 per ton in December 1973.
*This figure is a projection from the American Paper Institute
survey report, "Capacity 1972-1975, with Additional Data for 1976-1978;
Paper, Paperboard, Wood Pulp Fiber Consumption" (New York, 1973, 25 p.).
Data from this survey are used here because they are reported by region.
These estimates are distinct from the Census data reported in Tables 1
and 2; however, the totals agree closely with the Census data, which
indicate an increase in domestic wastepaper consumption in 1973 of
954,000 tons.
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TABLE 4
UNIT EXPORT PRICES AND WHOLESALE
PRICE INDEX FOR WASTEPAPER
Price Indexes
Unit export price*
Year (average price per Export index+ Domestic index+
ton, in dollars) (1967 = 100) (1967 = 100)
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
$ 33.02
40.77
36.90
39.63
43.36
45.33
48.14
44.05
41.90
45.66
48.08
49.54
43.97
44.95
49.75
58.36
52.33
49.72
68.87
75
93
84
90
99
103
109
100
95
104
109
113
100
102
113
133
119
113
157
153
155
107
122
155
116
103
. 125
118
118
127
134
100
130
139
125
112
134
197
*1955-70 data: Joseph E. Atchison Consultants, Inc.,
Wastepaper recycling, Table LVI; 1971-73 data: U.S. Bureau
of the Census, U.S. exports series EM-522.
+Column (1) divided by 1967 price of $43.97 per ton.
tu.S. Bureau of Labor Statistics. Wholesale prices
and price indexes. Washington, U.S. Government Printing
Office. Wastepaper is code 0912.
-------
200
190
1BO
170
160
150
140
130
120
110
100
90
80
70
Domestic Price Index
•H * Export Price Index
J L
,1. 1 L
' '
I - 1 - L
1955 56
57 58 59 60 61 62 63
64
YEAR
65 66 67
68
69 70 71 72
73
Figure 2. The export and domestic wastepaper price indexes for 1955-73 show parallel increases and decreases, particularly since
1963. Values are taken from Table 4 of this report.
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11
TABLE 5
INCREASES IN DOMESTIC DEMAND AND IN EXPORTS OF WASTEPAPER, 1973
(in thousands of tons)
West and
South Great Pacific
Northeast^ Atlantic South?* Lakes* Coast** Total
Increase in domestic
demand* 180 258 91 357 79 955
Increase in exports* 37 11 21 1 198 268
Total increase 217 269 112 358 277 1233
*American Paper Institute (API), capacity 1972-1975, p. 21.
+U.S. Bureau of the Census, U.S. exports, series EM-522. (Data reported in
Table 2 of this report).
^Domestic demand corresponds with New England and Mid-Atlantic designations
of the API capacity survey for 1972-75.
^Domestic demand corresponds with East South Central and West South Central
designations of the API capacity survey for 1972-75. Exports correspond with
Gulf and Southwest desginations of Table 2 of this report.
#Domestic demand corresponds with East North Central and West North Central
regions of the API capacity survey for 1972-75. Exports corresponds to North
Central designation of TAble 2 of this report.
**Domestic demand corresponds with Mountain and Pacific designation of the
API capacity survey for 1972-75. Exports correspond with California, Northwest,
and Hawaii of Table 2 of this report.
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12
Regional export patterns, however, were not the sole cause of these
increases. Rapid price increases and supply bottlenecks occurred in
wastepaper markets throughout the country and affected all paper grades.
For example, prices for old news in the Chicago area increased from $20
to $50 per ton in 1973. The price of old corrugated increased even more
rapidly; in Chicago, its price rose from $24 per ton early in 1973 to
$55 to $60 per ton at the end of the year. Overall, the Chicago market
area (where there were virtually no export increases) reported the
highest market prices in the country, while Los Angeles (where exports
increased dramatically) typically reported the lowest prices. In February
1974 the quoted Los Angeles price for No. 1 news was $34 per ton, while
the Chicago, Boston, New York, and Philadelphia prices ranged from
$42.50 to $60 per ton.
A comparison of wastepaper use and population for each region
(Table 6) helps clarify the relationships among exports, price increases,
and other factors. The population of each region gives an indication of
the available supply of wastepaper.* The regions with the largest
domestic wastepaper use are the North Central and Northeast (Table 6,
column 2), while exports impact predominantly on the West Coast and
Southwest and Gulf regions (column 5). Regions in which regional
population as a percent of total national recovery (column 4) are
assumed to have a larger untapped potential supply of recyclable paper
than other regions. Since the West has lower total recovery of wastepaper
relative to population than other regions, one may infer that it is
underutilizing its wastepaper resources, despite the significant increases
that have taken place in its exports. Total wastepaper demand in this
region—both domestic and export—is low relative to other regions, and
therefore there is less strain on the supply system in this region, and
prices would be expected to increase less rapidly than in other regions.
However, because both domestic consumption and exports of wastepaper are
disproportionately oriented toward news on the West Coast, the market
situation for that grade in undoubtedly more critical than for all
wastepaper grades taken together.
Nationwide, factors other than exports heavily influenced the price
increases and supply shortages encountered in 1973. Total domestic
wastepaper consumption increased by over 8 percent, in most regions and
for most grades of wastepaper, demand factors were largely responsible
for the price increases experienced in 1973. However, there is some
evidence that wastepaper from traditional sources decreased in 1973.
Measures introduced to conserve scarce paper stocks reduced the amount
*Population is not a perfect proxy for wastepaper availability,
although it does give some indication of the availability of postconsumer
discards. Per capita consumption of paper, and hence discards, may
differ by region; for example, per capita newsprint consumption is
greater in urban areas. Also, wastepaper is generated in manufacturing
and distribution operations, and these may be distributed differently
than population.
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TABLE 6
REGIONAL PROPORTIONS OF POPULATION, DOMESTIC WASTEPAPER USE, AND WASTEPAPER EXPORTS
Region
West and
Pacific
Coast
North
Central
North
East
South
Atlantic
South west
and
Gulf
Year
1970
1971
1972
1973
1970
1971
1972
1973
1970
1971
1972
1973
1970
1971
1972
1973
1970
1971
1972
1973
(1) (2)
Regional wastepaper
Regional population use as a percent of
as a percent of national wastepaper
national population* use-i-
12.3
19 6 N/A
ly-b 11.9
11.6
36.6
27 0 N'A
U 36.6
36.6
32.4
28 1 N//A
30.7
29.9
9.9
12 7 N/A
11.4
12.4
8.8
12 6 N/A
9.5
9.4
(3)
Regional wastepaper
exports as a percent
of national
wastepaper exports^
35. 3
28.8
46.5
15.1
34.2
20.8
9. 7
8.1
10.5
7.4
6.2
5.4
32.4
22.7
16.9
(4)
Regional wastepaper
recovery as a
percent of national
wastepaper recovery^
13.0
N/A
12.4
13.1
36.0
N/A
36.5
35.9
31.7
N/A
30.1
29.0
9.8
N/A
11.2
12.1
13.0
N/A
9.8
9.8
(5)
Regional
exports as
a percent
of regional
recovery^
8.6
N/A
7.0
16.0
1.3
N/A
2.8
2.6
1.0 ^
N/A l
.8
1.6
2.4
N/A
1.6
2.0
10.8
N/A
6.9
7.8
*U.S. Bureau of Census. 1970 Census of population, v.l. Characteristics of the population.
pt. A. Number of inhabitants. Washington, U.S. Government Printing Office, May 1972.
+1972 and 1973 data: American Paper Institute, Capacity 1972-1975; 1970 data derived from:
McClenahan, W.S. Consumption of paper stock by United States mills in 1969 and 1970. TapjDi^,
55(11): 1605-1608, November 1972. No data was available for 1971 by region.
£u.S. Bureau of the Census, U.S. exports, Series EM-522.
^Ratio of regional to national domestic use plus exports.
^Regional export tonnage divided by regional recovery tonnage.
-------
14
of scrap generated, and inasmuch as these scrap stockpiles are an
important source of wastepaper, this curtailment meant that readily
available stocks were decreasing even as demands were increasing.
This reduction in supply was especially important in the waste news
area, unsold newspapers (overissue news) are an important source of this
grade of wastepaper, and conservation measures may have halve the
amount of available overissue news. If this in fact did happen, it
would suggest that supply reduction had a more important impact on
markets than the increase in either domestic or export demand for old
news.
Analysis of the Waste News Market in the Western United States
We have seen that exports had their primary impact on the West
Coast waste news market, that they comprised 71 percent of the total
1972-73 increase in wastepaper recovery in this region. Waste news
constituted over 40 percent of these exports. In order to analyze the
waste news market on the West Coast, the three major market factors—
exports, domestic consumption, and waste news availability—must be
considered.*
The capacity survey conducted annually by the American Paper
Institute estimated national and regional wastepaper consumption by
grade. Nationally, domestic consumption increased by 964,000 tons, of
which 156,000 tons, or only 16 percent, was waste news. By contrast,
domestic use in the Western region increased by 79,000 tons, of which
39,000 tons, or about 50 percent, was waste news. The export demand for
waste news on the West Coast, as we have seen, increased from 38,000 to
127,000 tons—an increased of 89,000 tons. Thus, the total increase in
demand, for waste news equal to the sum of these two quantities, is
128,000 tons.
Estimates of waste news availability+ in the West in 1972 and 1973
(Table 7) help to clarify the supply side of the equation. Waste news
supplies include, in addition to the discards from homes and offices
*The entire West, not just the Pacific Coast, is included in this
analysis, since the domestic consumption data reported by the American
Paper Institute is available only for the West as a whole. This region
includes the Mountain States of Idaho, Montana, Colorado, Wyoming, Utah,
Nevada, Arizona, and New Mexico, as well as the Pacific Coast States of
California, Oregon, and Washington.
+Estimates of the availability or supply of waste news made in this
analysis refer to the quantities of news discarded from urban areas,
rather than to the economic supply concept of the functional relationship
between price and the quantity of material actually offered for sale.
To our knowledge, no supply curve estimates of the latter sort exist for
old news.
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TABLE 7
AVAILABILITY OF WASTE NEWS IN WESTERN UNITED STATES
(in thousands of tons)
1972
1973
(1) Bulk newsprint consumption by
newspapers*
1,568.0
1,602.5
(2)
(3)
(4)
(5)
(6)
(7)
Total newsprint consumption+
Total printing and distribution wastes
Printing wastes^
Overissues^
Delivered news#
Available postconsumer news**
1,864
200
55
144
1,663
1,259
.4
.6
.9
.7
.8
.5
1,905.5
112.8
38.1
74.7
1,792.7
1,357.1
*The 1972 entry is from: Newsprint statistics. American Newspaper
Publishers Association Newsprint and Traffic Bulletin, (10):19-30,
Apr. 13,, 1973. The 1973 data is based on the 1973 growth estimated implied
in the following source: Udell, J.G. The supply and demand for newsprint
in the United States; 1962-1972 and the future outlook. American Newspaper
Publishers Association Newsprint and Traffic Bulletin, (36):87-105,
Dec. 28, 1973.
+Assumes that newspapers consume 84.1 percent of bulk newspaper.
^Assumes that printing wastes were 3 percent of newsprint consumption
in 1972 and 2 percent in 1973.
^Assumes that overissues were 8 percent of printed materials in 1972
and 4 percent in 1973.
#Row (2) less row (3).
**Row (6) adjusted for the fraction within standard metropolitan
statistical areas. Data from the 1970 Census of Population indicates that
.757 of the population in the Western United States was in such urbanized
areas, where delivered news would be available for recovery.
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(postconsumer discards), two categories that occur in publishing and
distribution: printing wastes and overissues. These two sources
constitute a readily available portion of total waste news supply.
In 1972, readily available waste news in the West (printing wastes plus
overissue news) was about 200,000 tons; in 1973, this had dropped to
113,000 tons. If we assume that 80 percent of these printing and
overissue wastes are recovered, this 87,000-ton reduction in readily
available old news would amount to a net supply loss of 70,000 tons.
This supply loss, together with the increases in Western domestic and
export demand, amounts to a total shortfall of 200,000 tons—almost
all of which was met by increasing recovery from household and office
discards, the postconsumer sources.
Total demand went from 363,000 to 491,000 tons and, if the portion
met by overissue and printing wastes is deducted, one finds that the
amount supplied by office and household sources equals approximately
200,000 tons in 1972 and approximately 400,000 tons in 1973. Thus,
postconsumer recovery seems to have almost doubled in this period and
prices of wastepaper naturally rose. Comparing these recovery estimates
with estimates of the total of old news available from postconsumer
sources (Table 7) suggests that the supply system recovered about 16
percent in 1973 and about 29 percent in 1973.
Exports, which accounted for almost half of the increased demand,
obviously were a major influence on this market. However, reductions
in printing and overissue sources were almost as significant. The
evidence suggests that in 1973 in the West, exports played a complementary
role in increasing the overall wastepaper recovery levels, bringing
them more in line with recovery levels in other parts of the United
States.
Conclusions
Wastepaper exports are steadily becoming a larger fraction of total
U.S. wastepaper recovery, though in 1973 they were still less than 6
percent of total U.S. wastepaper recovery. Regionally, the importance
of exports varies widely, ranging from less than 2 percent to 16 percent
of regional wastepaper recovery. The impact of exports is not uniform
across wastepaper grades; old news, for example, increased from a relatively
minor element of wastepaper exports in 1972 to almost a third of 1973
West Coast wastepaper exports.
The impact of wastepaper exports on domestic markets was most
significant on the West Coast in 1973 as well as in previous years.
However, the shortrun impact on other regional markets may be significant,
for although exports represent only 2 percent of total consumption in
some regions, they constituted about 20 percent of 1973 consumption
increases in several regions.
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Significantly, exports from the West Coast in 1973 seemed to
increase that region's recovery rate, bringing it closer to recovery
levels and market conditions in other regions, rather than causing
unusual price or supply difficulty. Since both domestic and foreign
wastepaper demand in the West is greater for news than for other grades
the price and supply for that grade was affected the most.
The erratic historic pattern of wastepaper exports makes any
future predictions of their significance for U.S. markets extremely
difficult, but these exports are a factor of increasing interest for
buyers and sellers of wastepaper and for others interested in paper
recycling.
ya!051
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