What one Midwestern broker describes as "screaming demand" from overseas markets has kept the scrap paper market relatively stable throughout the early spring.
The Midwestern broker says the majority of the demand is still coming from China and that he’s getting weekly calls from exporters, which tells him that the markets should stay that way.
Demand from China has remained particularly dominant in the old corrugated cardboard (OCC) market. Sources say China’s economy has been surging ahead and is continuing to grow at a faster rate than anticipated, which is creating a strong and steady demand for packaging.
While processors may be enjoying the booming export business, it can be tough on domestic mills, which are having some trouble competing. However, according to industry sources, the export price has seen a slight drop in asking price of about $5 in $1-$2 increments throughout the course of the month, helping to close the gap between export and domestic prices.
A Midwestern recycler reports having experienced a more sluggish market throughout the last three weeks in March, saying inventories were piling up at a number of domestic mills, which are holding back on their orders as a result. "Things are not scheduling as easily as they have been," he says.
Sources across the county report that office grades are still suffering from a generally weak market. They say that the increasing interest in secure document destruction is continuing to have a negative effect on non-shredded office grades and coated book by flooding the market with supply. "We’re creating more of [the shredded grade] then ever before," says another broker.
A California recycler says office pack has declined significantly in price—nearly $15 in some cases. He says a large consumer in China has a large inventory built up, and other regular buyers in Mexico, the United States and the rest of Asia are equally stocked with inventory, which has resulted in a curtailing of buying.
The effect has been felt domestically, too. A recycler from New England reports that office grades have fallen $5 in price during March.
Old newspaper (ONP) on the other hand, has remained relatively stable, with No. 8 and No. 9 news showing signs of market strength. Pulp substitutes remain in short supply and high demand, and the price and supply of mixed paper has not seen any significant change.
A source from California says he was surprised to hear that packers were reporting that their receipts were only slightly off last month in spite of the unusually heavy rains that pounded the state.
Sources from the Northeast report some trouble getting trucks on the New York lines. Some say the Easter holiday may have been to blame, while others say discrepancies in freight costs were causing the headaches.
A Midwestern recycler also reports transportation problems stemming from increased fuel costs. He says higher fuel prices are raising freight costs. Many mills have been reluctant to pay increases, leaving trucking companies unwilling to haul the material.
Some sources on the West Coast report similar transportation problems, with some ports reportedly finding difficulty with booking and rates for exports.
Domestic scrap paper generation is reportedly strong in all grades, which seems to follow the general improvement in the U.S. economy.
(Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)

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