AF&PA Releases 47th Annual Survey

WASHINGTON, D.C.—The American Forest & Paper Association (AF&PA) released its 47th Annual Survey of Paper, Paperboard, and Pulp Capacity. The survey indicates that U.S. paper and paperboard capacity continued to edge lower in 2006, declining 1.6 percent to 97.7 million short tons. U.S. paper and paperboard capacity contracted 4.7 percent in the period from 2000 through 2006 or at an average annual rate of 0.7 percent. The survey explains that paper and paperboard capacity will decline another 0.7 percent in 2007 and then re-expand nearly one percent during the subsequent two years—rising 0.7 percent in 2008 and 0.2 percent in 2009. It also covers U.S. industry capacity plans for the years 2006 through 2009 for all paper, paperboard, and pulp grades. Industry total capacity by grade for all U.S. mills is included in the report.

Overview
Total U.S. paper and paperboard capacity declined 1.6 percent in 2006 to 97.7 million tons. The decline marked the sixth consecutive annual contraction in paper and, paperboard capacity, and the sharpest decline since 2001. Capacity declined only fractionally in 2004, and by 0.8 percent in 2005. For the six year period from 2001 through 2006, U.S. capacity to produce paper and paperboard declined at an average annual rate of 1.0 percent. Competition from paper imports, growth in the U.S. trade deficit with respect to packaged goods, and electronic substitution, were some of the factors that directly or indirectly led to the capacity reductions.

Despite the 1.6 percent decline, 2006 paper and paperboard capacity still came in 0.4 percent above the 97.3 million tons projected by last year’s survey. Looking ahead to the 2007-2009 projection period, aggregate U.S. capacity to produce paper and paperboard is projected to remain essentially flat, with capacity declining 0.7 percent in 2007, but then increasing 0.7 percent in 2008, and another 0.2 percent in 2009.