Exporters Can't Find the Tons
Baled OCC, Old Corrugated Cardboard, in 44,000-lb Loads
By Brook Edwards, Market Analyst, The Brown Sheet™
Sept. 6, 2010 - The Port of Long Beach is pretty much calling the shots as Exporters fill orders for the Overseas Economies that are not being stifled by unemployment. Foreign workers in China and through the East have money to spend on upgrading their livelihoods and recovered corrugated is in high demand for packaging those consumer items. With the two largest generating economies — United States and Europe — struggling at the retail levels, an abundance of material is just not on hand. Domestic Mills supported the market through August taking all tons available hedging the market would probably not drop. The majority of U.S. Mills are in good shape as far as keeping the warehouse filled with raw supply for their Mill, so no real panic buying prior to the Labor Day Holiday.
For Labor Day, I did not hear of any region that would not be able to make it through the five-day weekend. The China Buyers have not been so lucky. Since mid-August, when the Southern California Domestic Mills had to ante up because they were not getting their weekly allotment from Mexico, Domestic and Export Buyers were calling on the same suppliers. For the domestic mills to get tons, they had to pay $15 to $20 under what Long Beach FAS quote was for the day. Chicago Container prices run as close as $45 under Long Beach, so I expect to see some edging up through the Midwest as Exporters try to load containers throughout the Midwest. If 40-foot Overseas Containers are available in your area you should be receiving good offers.
The Southeast is its own little market and to keep track there you need a score sheet. They are gaining a reputation that use to be associated with the New York Market only they are playing it out internal. As the weeks go on we will get into the Southeast and try to understand where they are headed. Right now by being a diligent Seller you can catch some daily specials if you shop around enough.
It is unlikely that the spigot will turn on and the recovered fiber will flow any faster in September than it did in August. One thing that could possibly soften the market is that we find out that there are large quantities of finished Kraft Paper available that were produced at lower raw supply prices.
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The Brown Sheet is a brief bi-monthly newsletter that focuses on the recycled fiber market and provides recycled fiber producers with the knowledge they need to negotiate fair terms and prices for their baled product.
The Brown Sheet reports price changes for corrugated and low-grade fiber products and explores current and future markets.
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SOURCE: The Brown Sheet