<B>Offshore OCC Activity Slowing</B>

Many vendors felt the old corrugated market had stabilized. There were signs that offshore and Mexican buyers were starting to enter the market in large enough blocks to hold prices stable.

However, there are indications that prices are starting to erode, and export orders are drying up. One West Coast packer states that OCC orders are hard to come by. Reflecting the difficulties, he reports dock prices which have fallen by 410-$15 a ton.

While many vendors still feel that market conditions for OCC will improve during the first quarter of next year, the next few months could be difficult. Buying by Chinese mills is easing back. There is a sense that some of this move is being done to see how soft the OCC market could get.

With little offshore activity, the muted response by many domestic mills to the tonnage is creating some problems for many paper stock dealers. Despite ample downtime already taken, inventory problems in some regions of the country are keeping mills from aggressively going after additional tonnages.

While there are problems, a number of packers note that other board mills have been able to get inventories in line, and movement is not as difficult. This trend seems to be more likely in the eastern half of the country.

The Mexican market also is reporting a slowdown in OCC orders. This is creating some difficult conditions, not only in the Southwest, but also in parts of Southern California.

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November 2000
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