Strength Across the Spectrum

Paper stock markets continue to flourish. Prices for most grades of recovered fiber have moved up throughout most regions of the United States, with scattered reports of softness for particular grades. Sources no longer seem to fear a pending correction. That feeling of apprehension has been replaced with an upbeat outlook that extends through the fall.

Old corrugated container (OCC) markets continue to surge throughout most regions of the country. Prices are near record highs in many regions, as domestic buyers purchase larger blocks of material.

China has helped grow offshore orders in recent months. The export market also has benefitted from stable freight rates recently. Several sources say shipping containers are becoming more available on the West Coast.

On the East Coast, an exporter says OCC prices are moving at the mid-$200-per-ton level, with little sign of a price decline in the foreseeable future. He adds that many mills are in end-of-year Christmas production mode, which is boosting overall demand for raw materials, such as OCC, mixed paper and other bulk grades.

Paper stock dealers in other regions of the U.S. also say that price and demand for OCC remains strong. While OCC supply has improved since last year, many of the sources contacted for this report say overall supply is still far less than needed to meet many existing orders.

The old newspapers (ONP) grade also has shown price gains. The continued strength in ONP is confounding some dealers, who say many traditional consumers of the material (notably newsprint mills) continue to struggle with declining demand for their finished products. An ONP dealer in the Eastern U.S. says ONP export prices are in the mid-$190-per-ton level.

A number of factors are contributing to the strength seen in ONP, including the overall lack of ONP on the market. Generation of ONP continues to decline. Fewer newspaper readers mean less ONP is being generated. More recycling facilities and MRFs are commingling recovered ONP with mixed paper, further reducing ONP supply.

Several recyclers note that price spreads between mixed paper and a number of other grades have narrowed so much that it is financially more prudent to blend grades together rather than pay to separate them. At the same time, the mixed paper/ONP grade is becoming a popular export grade, sources say.

One vendor says ONP consumers that rely on clean grades of that commodity are in trouble. While he says he feels ONP will still be “around” for the long term, quality and supply will remain a challenge.

No. 8 deinked news is being called a dying breed, as more news is being collected through single-stream curbside collection programs. A broker says No. 8 news exists “in name only.”

As for mixed paper, prices have raced up, with some sources saying they have topped ONP prices, which is uncommon in the industry. Mixed paper prices are likely to remain higher than their historical norms.

Deinking grades and office grades also are in good shape.

(Additional information on secondary paper markets, including breaking news and consuming industry reports, is available at www.RecyclingToday.com.)