Old News is Good News
For a good portion of this year, old news was one of the few laggards in the paper stock market. While many of the other grades, especially bulk grades, posted strong improvements during the spring and into this summer, old newspapers (ONP) continued to languish.
However, recent indications point to—at least in the short term—ONP prices are starting to improve. Whether this has any staying power, however, is still uncertain.
The sense is that the biggest driver for the ONP market now is the improvement in OCC. There have been several reports of mills taking a look at substituting increased amounts of ONP for their OCC, especially with OCC prices showing significant upward price momentum.
The question now appears to be whether the increase will be able to hold. According to several exporters, the offshore market has not been as active for the grade.
What may end up happening is if the export market steps up and starts to compete with domestic buyers’ prices for ONP, then prices could solidify. This would then give ONP markets some basis for extended optimism.
During a recent run, OCC prices have climbed sharply, with some locations reporting purchase prices exceeding $100 a ton. With the strong push, there has been some caution being expressed. A number of vendors feel that there could be a softening of OCC prices at summer’s end.
(Fibre Market News is a bi-weekly publication covering the paper stock markets and paper recycling industry.)