Most grades of recovered fiber will likely hold steady for January. However, there seems to be a growing sense that the ONP market could take a tumble. East Coast activity has dried up for many regions as paper stock dealers see the closure of the Garden State mill in New Jersey as continuing the repercussions in the marketplace.
One trend that seems to be holding true is that movement for most grades is holding firm. Mills in the eastern half of Canada are loaded with inventory of both finished product and raw material. With the oversupply curtailing any demand, and downtime still significant through many parts of North America any bounce will likely not occur until later on in the first quarter of the year.
Another factor that will likely have some impact on markets for many paper stock grades during the first part of 2002 will be Chinese New Year. In 2002 the holiday falls in early February. During the time a good part of Asia basically shuts down. Shipments decline during this time, which means that any last-minute push will likely be wrapping up. This will curtail any sharp upswing in demand during the first months of the year.
The offshore market also is having to deal with the increased difficulty in obtaining containers for shipments. After several years of sharp declines in freight rates, many shipping agreements are looking to increase their freight rates. The result is higher prices for the recovered fiber.
At the same time, several vendors report increased difficulties in obtaining containers for shipments.
All in all, January is expected to be a fairly lackluster market for low grades, especially ONP.
Old corrugated containers, while moving, are not expected to see much upward movement during the first part of 2002. Downtime, an oversupply of finished product and ample amounts of recovered fiber on hand will likely keep the OCC market from improving.
Although there doesn’t appear to be much strength in the OCC market, most packers of the grade report being able to move all their material, although mills continue to remain reluctant to pay more for the material.