Within in an uncertain economic climate in North America, paper recyclers here can seemingly take comfort in ongoing global demand for the commodity they collect, process and ship out.
In his 2010 Paper Recycling Conference workshop “Fiber’s Future Intrigues: Scant Supply and Turbulent Pricing,” industry consultant Bill Moore of Moore & Associates, Atlanta, provided information on global demand as well as key supply factors.
Moore started by reviewing the recent price history of major scrap paper grades, showing charts that demonstrate the volatility of old corrugated containers (OCC) pricing from 1995 to 2010.
While the month-to-month line on the chart moves up and down sharply, a moving average plot line shows a clear upward trend from the $75 per ton moving average of 2002 to the nearly $110 per ton moving average at the end of the first half of 2010.
Prices for old newspapers (ONP) show similar but less sharp trends, with the moving average having gone from about $75 per ton in 2002 to around $105 per ton currently.
Although ONP’s pricing is less volatile, it has provided headaches for mills and recyclers on the supply side. “ONP has been chronically supply-short in the last five to 10 years,” Moore remarked.
Moore pointed to mixed paper as a grade that has risen in prominence in the past 10 years, in part because of the chronic under-supply of ONP. “Prior to 2000, recyclers really didn’t go out of their way to make mixed paper,” said Moore, who noted that the grade could trade for as low as $13 to $20 per ton in the late 1990s. “But now,” added Moore, “it’s all that’s left to recover, and Chinese mills have been buying it.”
Moore also predicted relative recovered paper price stability—with an upward trend—from 2010 to 2015. Regarding OCC, Moore commented, “We think the market’s going to be stable at around $120 for the next year.”
The final portion of Moore’s workshop was dedicated to the topic of supply development. “It used to be if you had mill buying control you were in the catbird seat,” said Moore. “Now it has shifted—if you have the supply in hand, you’re in the catbird seat.”
Residential and small commercial collection are the likeliest places to uncover new supply, said Moore, with companies and programs collecting from these sources beginning to look beyond newspapers and single-family structures on the residential side and working their way into smaller offices and shops on the commercial side.
The 2010 Paper Recycling Conference was held June 13-15 at the Chicago Marriott Magnificent Mile in that city’s downtown.