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| *Index is based on 1982 average prices as 100; Source: U.S. Bureau of Labor Statistics |
Sorted white ledger, office pack, manifold white ledgers and other high grades of recovered fiber have seen their prices climb significantly throughout 2010 and in the first few months of this year.
A number of vendors attribute rising paper stock prices to the weak U.S. dollar and to the fairly volatile pulp market. A weak U.S. dollar is helping to boost export of various raw materials from the U.S., including recovered fiber. Additionally, higher pulp prices have helped advance prices for pulp substitutes and deinking grades.
However, instead of being upbeat about the current strong prices for this material, a number of companies say they are concerned that fairly significant price declines could lie ahead. Soaring fuel prices caused by unrest in the Middle East, potential inflation and political unrest in Mexico, a consuming destination for many office grades, could be negative factors going forward.
One paper recycler in the Midwest says the recovered fiber market could move in one of two directions. “There is not much more room for the grades to climb,” the paper recycler says, predicting that prices will either plateau or that a downward correction will occur.
Many domestic paper mills have been building up their inventories, which may lead them to curtail their orders during the next several months, sources say.
Another growing concern among some paper recyclers and document destruction firms is the structural problems that can be seen in the commercial printing industry. Many paper recyclers say they are seeing closures or a reduction in print runs from commercial printers, indicating a decline in the freesheet paper market.
Not all companies say they are concerned that prices are at unsustainable levels, however. One paper recycler, who also operates a document destruction division, says his firm is getting “a ton of calls from mills asking us to ship them more material. We just don’t have any more.”
He singles out deinking grades, the market for which, he says, is holding up very well. “The movement is good.”
(Additional information on secondary paper markets, including breaking news and consuming industry reports, is available from SDB’s sister publication Recycling Today at www.RecyclingToday.com.)