In Depth

Supply and Demand

Paper and paperboard production has been expanding rapidly for over half a century and paper is now one of the most globalized commodities in the world, with high volumes of production exported and high volumes imported. Globally, from 1965 to 1990, production grew 3.7 percent annually. More recently growth has slowed to approximately 2.8 percent annually. 1

North America has historically been the top producer and consumer of paper and paperboard globally, but with the recent rapid economic growth in Asia, these two regions now rank as the number one and two global producers of paper and packaging.1

North American pulpwood supply

In North America, pulpwood (wood grown with the principal purpose of producing pulp) production is dominated by the Southern U.S. and is principally southern yellow pine species.

Fiber Supply by Area (pulp wood processed) Year 2000, in 000 short tons

*The color shading represents volume respective to other regions, ie. darker green equals more volume

Source: Pulp & Paper North American Factbook 20012

The historical supply of recovered fiber

The cost of manufacturing paper, like any product, depends on the costs of raw materials and production. The economics of fresh fiber paper production depends, in part, on the cost of timber, transportation, processing, and waste disposal. The manufacturing cost of recycled content paper depends, in part, on the cost to recover and transport the paper fiber, the yield (the actual amount of usable fiber derived from the recovered paper), and the cost of processing and disposing of waste.

Until very recently, there was a chronic shortage of recovered fiber in North America and all available recovered fiber was utilized in products such as paperboard, tissue, and newsprint. The main contribution of some paper-based products, like magazines, in a recycled fiber shortage is that they are a good source of reusable fiber.

Increasing the recovery of paper-based products like old magazines (OMG) returns high-grade fiber to the manufacturing stream. Paper recovery is an important source of fiber, and an effective way to take pressure off forests and landfills.

Current supply of recovered fiber

The supply of recovered paper has recently deviated from its historic trend. With the global economic downturn in 2008 and 2009, there has been an over-supply of recovered fiber and the price has dropped precipitously. According to the New York Times, the price for recovered paper fell from $50 USD per ton to $5 USD per ton between October and December 2008. Experts suggest that the credit crisis, along with the steep drop in Chinese demand and the global market downturn, has had a dramatic effect on the world’s recovered paper business.

The current market price for recovered fiber is not sufficient to cover the cost of collecting and transporting recovered fiber to a mill. As a result, some paper mills that are engineered specifically to process recycled paper with high levels of recovered content are operating at reduced capacity, which is not an economically viable scenario over the long term.

Supply and demand drive the use of recovered fiber. The more fiber that is diverted from the landfill and recycled means there is less potential for methane to be produced and there is less pressure on the forest for fresh fiber. Some industry watchers believe that, in the current marketplace, steps—including government-mandated minimum recycled content—may be needed to reduce the paper waste that goes to landfills.

1. FAO. State of the World’s Forests 2009. Rep. no. ISBN 978-92-5-106057-5. FAO, 2009. (

2. Pulp & Paper: 1999 North American Fact Book. Gilroy: Miller Freeman, 1998.