Over the past several weeks there has been a swing in demand for old corrugated container. No one was predicting booming prices in the near term. However, more packers and brokers have been willing to voice the opinion that the worst is in the past.
That may be the case. However, over the next several months there could be some bumps in the road.
A large chunk of the downtime already has been scheduled and taken. However, there are still some intermittent closures occurring in various regions of the country. Several sources note that Abitibi-Consolidated’s Arizona mill will be taking its machines down for two weeks, essentially cutting off demand for OCC and old news.
Also in the Midwest the Abitibi mill in Sheldon, Tex., which is a large consumer of ONP, will be taking intermittent downtime throughout the next month, creating some uncertainty in the market.
Further West, Inland Paperboard and Packaging’s mill in Ontario, Calif., may take some machine downtime this fall. This also could create some difficulties for the bulk grades.
For those mills that are still running, some purchasing managers say they are able to obtain all the OCC they need. Prices aren’t likely to drop too much at the present time, although some vendors speculate that after some modest strengthening in the grade late last month and earlier this month September could see a rollback in prices.
Some of the more negative outlooks for the grade in the short term point to several of the larger consumers opting to scale back their demand in the near term, including International Paper’s Mansfield, La., mill pulling back larger orders.