For What It's Worth

by Nancy Lowther

Cost-conscious managers recognize that old newsprint can bring new revenue that helps offset operating costs. Knowing all the ONP grades and the monthly value of each means printers can be even more effective at negotiating prices with their collector or directly with the processor, often their paper mills.

The grades vary in purity:

Grade 6 is recyclable newspapers and/or inserts and magazines (comics and roto).
Grade 8 is recyclable newspapers without inserts and magazines.
Both of these are usually picked up at the curb from households by sanitation departments and then sold to processors.
Grade 5 is commercial printers' white roll wrappers, not to be confused with newsprint wrappers.
Grade 9 is uncirculated over-issue recyclable newspapers, which includes returns from stores.
Grade 11 is any brown cardboard and may include brown mill wrappers.
Grade 24 is white unprinted/virgin newsprint, slab waste and core waste.

With this base knowledge in place, newspaper managers can check for the latest prices offered for what's on hand. Sharon Hite, president and general manager of Scripps Howard Supply, points out, "The processor would much rather deal directly with newspapers because there is a much higher level of contaminants in ONP from the collectors."

You also get the most for your waste. "When going direct, if it's with a paper mill, they leave an empty trailer at the newspaper that they pick up full the next time they deliver new newsprint. For me, if the price is $25 a ton, I get the full $25. Going through a collector, I get $20 and the collector gets the other $5."

"Knowing what your processor is using allows for more effective negotiations, whether dealing direct or through a collector," Hite advises. "Right now, there is an overabundance of ONP, and prices have dropped.....ONP is a commodity, dependent on the supply and demand.

"Each geographic region has its own prices. In any region, Grade 9 gets the highest price, but right now, there is not a lot of demand for it. If a mill is producing recycled newsprint, they like to use Grade 9. If they are producing boxes, they prefer using Grade 6. Today, in the latter case, Grade 9 ONP is often being sold to them at Grade 6 prices."

Hite monitors some of those prices through a trade magazine, The Yellow Sheet, which lists some ONP prices. "It covers paper recycling and paper board, but not tissue and toilet paper, and not virgin newsprint," notes its editor, Mark Arzoumanian.

Hite says that knowing prices "helps me to forecast.....It is a great magazine for large newspaper companies, though it doesn't list Grade 9."

Arzoumanian explains why. "My mill sources say it's such a narrow niche that nine out of 10 [customers] don't use it. These mills also tell me it's difficult to determine an overall price because it isn't being bought on a regular basis."

Readers wishing to find out more information or make suggestions regarding the grades are welcome to call Arzoumanian at (312) 553-8922.

Nancy Lowther is president of Lowther Training and Development, Scarborough, Ontario. Phone and fax, (416) 282-1890.