Weather Affecting Recycled Fiber Markets in Many Areas

Baled OCC, Old Corrugated Cardboard, in 44,000-lb Loads

By Brook Edwards, Market Analyst, The Brown Sheet™

Feb. 7, 2011 - No matter where you are at you are going to see some weather related markets. Though most of the up ticks on the pricing page is related to weather the astric marked prices are super weather related (see: Feb. 7, 2011 Price Sheet pdf). Ice and snow have affected 35 states, making some multi-mills redirect material or possible ship finished like product out their normal region because their sister mill is having difficulty.

Also having great difficulty are the recyclers trying to gather in the product. When snow slows or delays pickups, material is oftened moved to the disposal side instead of being saved for recycling. The writers trips in the last two weeks into various transfer station facilities show huge amounts of loose corrugated bound for the landfill instead of the recycling center. This, coupled with the exporters re-entering the market this week, means for higher pricing in the immediate future.

Though the huge generators of used corrugated board, distribution centers and the food processors, will keep supplying their usual quantity there is a significant amount lost from individual stores where waste haulers who also gather corrugated are mixing materials in order to get the cans emptied. That material, which could be in the neighborhood of 10 to 20 percent of the region's generation amount, is what is showing up co-mingled and therefore not baled and sold to domestic mills.

Newspaper production is also off significantly, but that will be conteracted by Mix getting better prices as mills are forced to change their formulas at least temporiarily. A lot of this down-stream raw product feed information will not influence the market immediately because domestic mills did their due dillengence and filled their warehouses in better weather. They will notice however that their usage of baled materials is outpacing their supply, so pricing should be around the high side of what The Brown Sheet has shown for February 7, 2011.

With winter being just a little over half over I expect domestic buying to remain strong.

About The Brown Sheet™
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