ISSUE #0419
1750 K Street, NW
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CCTI Annual Meeting at the Gaylord Texan
Dallas, Texas
 May 19-21, 2019

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In This Issue

May 19-21, 2019

Deadline to for our special room rate is May 8th!

Registration is now open for the CCTI Annual Meeting to be held at the Gaylord Texan in Dallas, Texas on May 19-21, 2019.  We have several exciting things planned and the full agenda will be released in April!

Highlights of the CCTI Annual Meeting include a plant tour of Ox Industries, networking with your colleagues, updates on CCTI's working committees, and several educational sessions to help you run your business efficiently and effectively.  

We hope you'll consider bringing additional staff and guests to enjoy this annual industry gathering at the beautiful Gaylord Texan Resort! E verything is bigger in Texas and that includes Gaylord Texan Resort & Convention Center. Standing on the shores of Lake Grapevine with 4.5 acres of indoor gardens, 10 restaurants, seasonal water park and two pools, this is a resort that could only make its home in The Lone Star State. Conveniently located near Dallas/Fort Worth International Airport, as well as Grapevine Mills Mall, LEGOLANDĀ® and Cowboys Golf Club, this is a destination the entire family will enjoy! 

Room reservations at the Gaylord Texan can be made by clicking here, be sure to reserve your room by May 8th to receive our special rate of $199 per night (plus a $20 resort fee).  

We appreciate your continued commitment to the industry and we look forward to seeing you in Texas. If any of our staff members can be of assistance to you in planning your attendance at the CCTI Annual Meeting,  please contact us at 
Mr. John Morrison
1925 - 2019  
John Morrison

We are saddened to hear of the recent passing of John Morrison of Automated Container Corp. 

John was both a former CCTI member and a major contributor to the CCTI Technical Standards for composite cans.

Our condolences to the Morrison family, friends, and associates. Please click here for memorial service details and his obituary.
Eyes on US box shipments for March, 
e-commerce, and trade deal with China

US corrugated box shipments began slowly this year but RISI packaging economist Ken Waghorne expects brighter demand days going forward this year and in 2020 from continued growth in e-commerce and a US-China trade deal that should help global packagers.

Actual US shipments were up 0.8% in the first two months this year. Waghorne forecast that shipments would rise 2.3% for the full year. That means shipments must rise 2.6% per month on average for the rest of this year to reach his 2.3% full-year average.
"If domestic demand growth picks back up to the 2.5-3.0% pace during the second half of the year, the overcapacity situation should ease. But all bets are off if growth continues to struggle to reach 1%," Waghorne told PPI Pulp & Paper Week on Mar. 27.

US containerboard capacity at mills and corrugated plants reached a 16-yr high in January and 42-lb kraft linerboard pricing in March for the domestic market dropped for the first time in three years, by $10/ton on the 42-lb and by $20/ton on high-performance kraft linerboard, according to P&PW's survey. The survey also found price declines on US kraft linerboard exports in the last six months, including a $10/tonne decline to Mexico this month.

Some analysts this week pointed to economic headwinds. February non-durable goods manufacturing in the USA was flat, vs February 2018's total, and real US GDP declined from 3.4% in third quarter last year to 2.2% in fourth quarter. RISI forecast 2.0% for US real GDP in first quarter this year.

1.4-million-ton addition. Waghorne told attendees at the Paper2019 conference in Chicago on Mar. 26 that US containerboard consumption should increase 600,000 tons this year and by 800,000 tons in 2020, if manufacturing is growing.

New capacity planned this year and next, and 1% annual capacity creep may outpace Waghorne's estimated added demand, according to P&PW research. Pratt Industries is expected to start up a new 400,000 tons/yr containerboard machine in Wapakoneta, OH, in September/October, ND Paper a converted 250,000 tons/yr containerboard machine in Biron, WI, by fourth quarter, and McKinley Paper just filed permits this week in the state of Washington to convert a newsprint/directory paper machine in Port Angeles to a 250,000 tons/yr recycled containerboard and kraft paper PM that would start up by yearend or in early 2020. International Paper also plans a conversion of an uncoated freesheet paper machine at its Selma, AL, mill to a 450,000 tons/yr white top linerboard and containerboard PM in second-half 2020.

Waghorne forecast positive packaging growth going forward from e-commerce. He expects corrugated to benefit from what is expected to be a pickup from at-home food deliveries, for example. He saw minimal short-term impact from polyethylene pouches that some say are being more actively used for e-commerce deliveries.

Offshore, Waghorne expects a China-US trade deal will help global packaging demand in the second half of this year.

'Rhinos butting (economic) heads.' He likened the US-China dispute to "two big rhinos butting heads."
Waghorne expects a one-million-tonne increase in US containerboard exports in 2020. The main reason for this large increase is the fiber crisis in China, where the government banned mixed paper last year and implemented restrictive rules on all imports of recovered paper. China was the second largest export market for US kraft linerboard in 2018.

Waghorne said that China has increased its recovered paper recovery rate to 80% to 90% yet added that "China will need to import more containerboard in order to meet the strong demand for boxes."  He admitted that his forecast was "very fluid" because of the uncertainty about China's recovered paper policies, including a potential all-out ban on recovered paper imports in 2020.  China's policy shifts "will continue to alter global trade patterns," he said.

McKinley Paper is not expected to start production in Port Angeles, WA, this September as originally planned and at the earliest would start up near yearend or in early 2020, according to a local media report. A local government official made the timeline comment after McKinley applied this week for the permits from Washington state and local agencies to install $600,000 in new equipment at the Ediz Hook site in Port Angeles where McKinley will convert two directory and newsprint machines into 100% recycled containerboard and kraft paper machines. "They won't be able to make it, and they don't intend to make" a September startup, the official said. Construction and equipment installation will begin in the second half of this year, according to a city of Port Angeles environmental checklist for the project.

CCTI Fall Meeting, September 26-27 Early Bird R egistration Open!

If you'd like to plan ahead for the fall, we have confirmed the CCTI 2019 Fall Meeting in Las Vegas on September 26-27, immediately following Pack Expo. Register now for the best rates and rooms!  

W e have special room rates at the Las Vegas All Suites Marriott near the convention center and three blocks from the strip, that will be valid during the show also. Click here to book online, our special $159 rate will be available until August 29, 2019.

Registration is now open by clicking here.  Make plans to attend and watch for more information to be announced later in the summer regarding speakers and activities.
America-based Econscience launches new Great Lakes long lasting paper drinking straw made with domestic materials 

Econscience, Inc., an American manufacturer of high-quality paperboard alternatives to single- and multi-use plastic products, has begun shipping the Great Lakes Straw: a 100-percent paper drinking straw made entirely with domestic materials and labor that lasts the length of a day in one or multiple beverages. Straws will be available for purchase through select distribution within the U.S. and abroad.

With plastic straws being phased out in major U.S. cities and single-use alternatives largely limited to low-performing paper offerings made overseas, the Great Lakes straw addresses the growing need for a durable alternative. "People want to shift away from single-use plastic straws," says Econscience President and CEO Jonathan Dudlak, "but with so many sub-par paper straws on the market, they're bound to have a bad experience that makes embracing that change difficult. We wanted to make a product that performs as much like the plastic option as possible, just out of compostable paper."

With almost three decades of experience in spiral-wound paper products prior to forming Econscience (pronounced like "conscience" preceded with an "e"), the ownership employed a mix of proprietary equipment and domestic materials to develop a straw that will last all day under normal use. "You may not need your straw to hold up the full 12-24 hours we've seen these show in testing," Dudlak says, "But the point is you won't have to worry about it coming apart in the drink that's on your desk at work all morning, with you in the car throughout the day, or getting refilled repeatedly when dining out. Having to change out your straw under any of these circumstances because it becomes too soggy to use is contrary to the whole mission of waste reduction."

Econscience says the Great Lakes brand is a nod to the best natural resource its home city of Chicago has to offer. "The oceans are getting a lot of attention as part of this movement against plastic straws," Dudlak says. "But we wanted to keep the focus local and remind our home region that we have resources in jeopardy right here, and an obligation to protect them." He says supporting this effort is a key part of the Great Lakes Straw brand: "We're donating 2 percent of all proceeds from sales of Great Lakes straws to local and national nonprofit groups that are aligned in this mission."

Popular sizes of straws will be available in white and black from stock but custom orders can be printed with food-grade inks in virtually any design.
Domestic OCC and imported recovered paper prices decline in Mexico due to oversupply

Mexican old corrugated container (OCC) prices continued declining in March as supply remained higher than demand, sources told PPI Latin America. Prices moved from Peso 1,900-2,200/tonne ($100-110/tonne) to Peso 1800-2000/tonne ($92-102/tonne) this month, delivered, and are around 11.6% lower than March 2018.

Sources said there is a strong offer of both imported and domestic OCC in Mexico. "We are facing a slowdown in exports for China, which means there is even more material available for the domestic market," a source commented.

"Inventories are still high and there is great supply of both local and imported material," another contact said. In February, when price reductions of around Peso 100/tonne were taking place, a new drop was already expected for March, the contact stated.
"Recyclers are reducing prices. We still have a good amount of inventory and our supply is stable," a buyer said.

In spite of the downward trend in prices for the entire country, sources noted that in the northern part of the country prices are higher than in southern states, as the northern market is being impacted by expansion projects being led by a few corrugated mills. "This is taking some of the excess supply out of the market," said one source. While prices in the north are around Peso 2,000/tonne, greater discounts are being given to buyers in other regions, this contact reported.

Contacts in Mexico also mentioned that double-lined kraft corrugated cuttings (DLK) prices are currently at around Peso 2,700/tonne. One seller said that prices for DLK are falling around 10% in March compared to the month before.

Imported OCC. Prices for US OCC in Mexico declined from $105/ton ($115/tonne) in February to $85/ton ($93/tonne) in March, as supply for imports also remains higher than demand. The current price is 32% lower than March 2018. In peso terms, current prices for imported OCC is Peso 1,820/tonne.

Data from the Global Trade Information System (GTIS) show that Mexico imported 439,223 tonnes of OCC from the USA in 2018, an 11.3% decrease over the previous year.

"There is excess material in the southwestern area of the USA, which allowed a greater supply of imported OCC," a Mexican contact said.
According to a US source, DLK prices are also going down as some players are selling DLK as a substitute for OCC. "It is doing more damage to the OCC market," the contact said.

Other grades. The GTIS data show that Mexico imported 939,654 tonnes of high grades from the USA, a 17.3% increase in 2018, as well as 140,974 tonnes of mixed papers and 154,577 tonnes of old newsprint, respectively 12.2% and 2.6% higher than a year ago .

Mexico's total recovered paper imports from the USA in 2018 climbed 6.5% to 1.6 million tonnes year-over-year.
According to the PPI Latin America survey, prices for imported old newsprint (ONP) declined by $10/ton to $40/ton from February to March in Mexico and are 46,7% lower than a year ago. "We can't get any export orders on newsprint. Mexico isn't buying as much," a source in the US market said.

As for coated groundwood sections (CGD), prices declined from $150/ton in February to $140/ton in March and are 3.7% higher than last year. According to another US contact, inventories are getting higher.
On US hard white envelope cuttings (HWEC), exports prices to Mexico dropped from $460/ton to $440/ton in March and are 4.8% higher than a year ago.

US sorted office paper (SOP) exported to Mexico has also seen prices declining from $210-220/ton in February to $190-200/ton in March. Compared to the same month of 2018, there was an increase of 5.4%.

PPI Latin America also shows lower prices for imported sorted white ledger (SWL) in March over February, at $310-320/ton this month. Price levels, however, are 10.5% higher than a year ago. "A lot of printers in the world generating those grades slowed in generation, but the problem is the market wasn't able to keep up with generation in prior months, so there's large supply at this moment," a source said.  
VPK to Acquire European, Chinese Businesses of Corenso

PK Packaging Group has reached an agreement to acquire the European and Chinese businesses of coreboard and tube producer Corenso. Corenso is an international supplier of coreboard, cardboard tubes and cores which are used in a broad range of demanding industrial applications.PK Packaging Group has reached an agreement to acquire the European and Chinese businesses of coreboard and tube producer Corenso. Corenso is an international supplier of coreboard, cardboard tubes and cores which are used in a broad range of demanding industrial applications.  Complete story here

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