Board Converting News, July 3, 2023

AF&PA Reports Year Over Year Decline In Paperboard Production The American Forest & Paper Association (AF&PA) recently released its 63rd Paper Industry Capacity and Fiber Con- sumption Survey, and the results show a slight decrease in U.S. paper and paperboard capacity. Last year, paper and paperboard capacity declined 0.4 percent to 81 million tons, which fares slightly better than the 0.9 percent average decline per year since 2013. “The U.S. paper industry continues to respond to shift- ing demands by converting paper machines to produce packaging grades, supporting U.S. manufacturing jobs and sustaining local communities as well as increased the use of recovered fiber,” the AF&PA says. Paper and paperboard production also declined, falling 3.3 percent last year. According to the report, boxboard

production increased, containerboard and printing and writing paper decreased and tissue remained flat. The AF&PA examined paper-based packaging capaci- ty and found that containerboard capacity decreased 0.6 percent last year. However, containerboard’s share of total paper and paperboard capacity continued to exceed 50 percent. Boxboard capacity increased 2.4 percent and could continue ticking up with at least three announcements of additional boxboard capacity planned in 2025 or later to meet demand for paper-based consumer packaging, AF&- PA says. Both printing and writing paper and tissue capac- ity declined last year, too, with printing-writing capacity decreasing 0.7 percent and tissue decreasing 0.4 percent. The AF&PA reports a printing-writing machine was restart- ed last year as the sector rebounds from major declines during the coronavirus pandemic and says there were no printing-writing closures.

In the packaging sector, total packaging papers and specialty packaging shipments in May decreased five percent compared with May 2022 and are down four percent when compared with the first half of last year. The AF&PA survey is based on a survey of U.S. pulp and paper mills and details U.S. industry capacity data for 2022 and 2023 for all major grades of paper, paperboard and pulp, as well as fiber consumption. It in- cludes production data for 2022. The data represent about 88 percent of U.S. paper and paperboard industry capacity, with es- timates completing the data set. NAM: Manufacturing Contracts Again In June Manufacturing activity contracted for the second straight month at the weakest pace year to date in June, with the S&P Global Flash U.S. Manufacturing PMI dropping from 48.4 in May to 46.3 in June, according to Chad Moutray, Ph.D. and Chief Econo- mist at the National Association of manu- facturers (NAM). The headline index was pulled lower by sharply reduced new orders (down from 47.1 to 42.7) and output (down from 51.0 to 46.9), with exports (up from 43.4 to 44.2) also fall- ing strongly but at a slower pace. Hiring (down from 53.1 to 52.4) and future output (down from 68.4 to 62.6) slowed in June, but with respondents continuing to signal optimism about production over the next six months, even with some easing.

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July 3, 2023

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