Fits and Starts
Recovered paper markets are displaying some positive signs, though location may be a key factor in determining whether dealers are seeing a rally.
Chinese buyers have been purchasing bulk grades, such as old corrugated containers (OCC) and old newspaper (ONP), though not enough for many dealers to celebrate an end to the challenging environment. In fact, while some coastal regions have enjoyed a pickup in offshore demand, those further inland are having difficulties obtaining containers for shipment, which is keeping a lid on the movement of material.
On the domestic side, one Midwestern paper recycler notes that bulk grades, especially OCC and ONP, are having a difficult time right now. However, higher grades, while depressed to a degree, are moving.
A number of issues are cropping up within the North American market. Insulators, who purchase steady amounts of some low grades, have been affected by the slowdown in new home building. Also, the financial health of a growing number of North American paper companies has dealers concerned. AbitibiBowater, Montreal, recently filed for bankruptcy protection, joining Smurfit-Stone Container, Creve Coeur, Mo.
Paper companies throughout the United States are challenged by languishing demand. SP Newsprint, Atlanta, has taken downtime at its Oregon and Georgia mills in light of slow demand for finished product. Other mills have announced downtime or are opting to close facilities permanently.
(Additional news on paper recycling markets, including pricing information, is available from SDB’s sister publication, Recycling Today, at www.RecyclingToday.com.)