No Big News, But OCC Prices Easing

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

By Brook Edwards, Market Analyst, The Brown Sheet™

April 7, 2011 - One would think with what all that is going on in the world — especially with the situation in Japan — that the commodity market strengths that are occurring already in the Metals would trickle over into the paper market, but not yet? In fact, we are seeing an easing of OCC prices across the U.S. from their March highs.

In my opinion there is news and the news is that quantities are ever so slightly increasing in what is available to bale and ship. There seems to be a lot more interest in the pricing structure that is being updated and published and it is attributed to a few extra loads being generated especially since the winter freeze is over. Overseas freight increases are most likely affecting U.S. West Coast pricing already and the fact that China has slightly slowed its economy is affecting outbound loads to levels that have not raised much from the Chinese New Year celebration.

In this issue of The Brown Sheet, you will notice a fairly dramatic change in the ONP #6 prices because up until now we have not been able to actually have a good feel of where it is because not that much of the material is transferred from seller to buyer as #6.

If you want to follow the beat though of the North American paper market keep your eye on the Southeast as they seem to be the leader in what direction the market will move. Supposedly now they are running a lot more wood (chips) trying to back up the supplies of baled OCC so they can nudge the market down before its summer traditional rally.

But I believe tradition is out the window and it is all based on a recovering economy and how much discretionary income Americans have to spend. Housing is a long way from recovery but remodeling a room in an existing home and foreclosure fix ups are putting a portion of the construction trade back to work. Unemployment and deficit spending is still high, and until this is resolved every month has the opportunity to turn on a dime.

See The Brown Sheet: April 6, 2011 Price Sheet (pdf).

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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