Generation of OCC is Matching Demand

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

By Brook Edwards, Market Analyst, The Brown Sheet™

June 14, 2011 - Generation of OCC in some areas of the U.S. is matching demand, but when it comes to holidays the "PLAY BALL" sign comes out and there is not near enough paper for the demand. Mill buyers are extremely thankful that West Coast shipments have not shown signs of China willing to pay above domestic prices.

Corrugated is extremely tight throughout the U.S. and Canada, and mills continuing to work and not take downtime puts extreme pressure on available supplies be equally distributed where needed. When we reported prices rising last month we tempered our statement that this will slow demand, but no such thing has happened yet. Though fuel is high the backhaul rates to move corrugated 500-plus miles is available and we are seeing that happen. Regions such as the Southeast and Southwest U.S. will extend out of their zones as long as they find trucking companies willing to work with them.

Newspaper has hit the skids because of lack of demand. Over issue and #8 that was put on the market by cellulose manufactures in May making money, inventory has now driven the market down. This is the time of year though when available supplies coming in from recycling facilities drops off, so it should be a short-lived downturn before it finds its footing once again.

When it comes to upper grades for the tissue industry it is a bidding situation that does not involve a lot of volume as far as available loads being offered for sale — almost all are under contract. But the prices get reported when buyers do pay $10 more, and that is what puts the market up.

With the upcoming July 4 (U.S. holiday) falling on a Monday, the sellers have it made — should be some good prices being offered at the end of the third week of June.

See: June 8, 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.

For further informmation on the recycled fiber market and recovered paper pricing, please visit The Brown Sheet website at: The Brown Sheet

SOURCE: The Brown Sheet