Offshore Demand Driving Market

Despite less than stellar performance on the domestic side, the continued strength in offshore orders has resulted in an overall improvement in markets for old corrugated and mixed paper.

During the recently held American Forest and Paper Association Paper Week program a number of attendees noted that orders have been fairly strong to China. This move is forcing more domestic mills to offer higher prices to guarantee steady supplies. At the same time a number of these mills are trying to hold domestic prices stable.

Downtime continues to be a key factor for domestic board mills. A host of the larger paperboard mills have opted to either take downtime or are scheduling downtime. Despite such a significant amount of production coming off line, the strength in orders could boost prices for some of the lower grades.

While there has been strength in some of these grades, container availability is becoming an issue. With the buildup of troops and supply in the Middle East, some exporters are saying that the cost of containers has been increasing, making it even more difficult to obtain and ship containers of recovered fiber.