Page 76 - Plastics News May 2024

IN THE NEWS

The company sought to diversify its in the previously nascent pulp export Multiple attempts to solicit comment
feedstock channels as the Chinese market: Recycled pulp exports jumped from Nine Dragons on the current sta-
government continued to heighten re- from 48,000 short tons in 2018 up to tus of those two U.S. mills and recy-
strictions on fiber imports: U.S. recov- 295,000 short tons in 2019, year-over- cled pulp exports were not successful
ered paper exports to China dropped year growth of more than 500%. They by press time.
from 14.5 million short tons in 2016, grew to 362,000 short tons in 2020, Moore has firsthand knowledge of the
down to 12.0 million short tons in 458,000 short tons in 2021 and a challenges with recycled pulp exports.
2017, 8.3 million in 2018, 5.9 million whopping 531,000 short tons in 2022. He was part of the team developing
in 2019, 5.0 million in 2020, and plum- But in 2023, the upward trajectory Empire Recycled Fiber, a planned re-
meted to just 500,000 short tons in crashed down, with recycled pulp ex- cycled pulp mill in the Northeast U.S. It
2021, a whopping 89% drop year over ports dropping 60% to hit 211,000 was announced in 2020, with a planned
year. That means in 2021, U.S. exports short tons. By the end of 2023, pulp location in Fairless Hills, Pennsylvania.
of recovered fiber to China were down exports had dwindled to just 8,000 The project was later relocated to Day-
96% from what they were just five short tons in November and 4,000 ton, Ohio.
years earlier. short tons in December – a far cry
By mid-2021, Nine Dragons had se- from 33,000 short tons and 38,000 But now, Moore says, the project is
dead. He identified a few key challeng-
cured 313,000 tons per year of U.S. short tons in November and December es that the project couldn’t overcome.
recycled pulp production. And the 2022, respectively.
company wasn’t alone in pursuing The low volumes have continued this “In order to finance a project to sell
this business model. Another major year, with monthly volumes averaging pulp to China, you have to have a long-
Chinese paper firm, Shanying Inter- around 4,000 short tons. term, 20-year guaranteed contract that
national, purchased a shuttered paper you’ve got a buyer in China,” Moore
mill in Wickliffe, Kentucky in 2018, and Many of the planned recycled projects said. The Empire mill had a buyer in
in 2019 the company announced plans have been paused or canceled, and ex- place who was ready to purchase the
to develop a paper recycling facility isting plants have scaled back. material, but the buyer didn’t want to
onsite to produce recycled pulp and Shanying International’s Kentucky fa- sign on to numerous terms and credit
export it to China. Over the next few cility is indeed active and successful, guarantees that would be needed for
years, a handful of other companies operating as Phoenix Paper, but the re- the facility to secure funding, Moore
announced plans to develop recycled cycled pulp portion never materialized. explained.
pulp mills from scratch. The facility produces a bleached virgin It’s a financing issue, and Chinese
The activity – particularly Nine Drag- pulp product. mills simply don’t want to sign 10- or
ons’ mill acquisitions and export plan At Nine Dragons, macroeconomic fac- 20-year purchase contracts, he said.
– translated into exponential growth tors played into a substantial pullback “That, and COVID, really nixed the pro-
in U.S. operations. A year ago, the ject,” Moore said.
company announced it would “sig- Additionally, for companies looking
nificantly reduce” pulp production at to sell recycled pulp to external buy-
its Fairmont, West Virginia, mill, and ers – as opposed to companies like
that it would idle its Old Town, Maine, Nine Dragons that were aiming to
facility. Both facilities were previously use it internally – recycled pulp prices
producing recycled pulp. The an- have added another headwind: Re-
nouncements came as Nine Dragons cently they were hovering at $300 to
reported a loss for the latter half of $325 per metric ton delivered to China,
2022, the first time the company had which Moore noted is very low.
reported a loss since 2006. Addition-
ally, the company cited rising costs of Total Fiber Recovery is now opera-
fiber and energy contributing to the tional
scaling back of U.S. operations. There are a few exceptions to the over-

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