OCC Prices Down Sharply in November, Containerboard Stable, Market Pulp Still Falling
Nov. 17, 2011 - As expected, OCC (Old Corrugated Containers) fell sharply in November. PPW reported a $31/ton drop in domestic OCC to $127/ton. Export OCC is down $45-60/ton, said analysts at Deutsche Bank (DB).
However, Mark Wilde, senior analyst at DB who covers the paper and forest products sector, said, "Our channel checks indicate a pick-up in inquiries for OCC, which could lead to a rebound in OCC demand. These inquiries appear to have been from domestic customers. We don't expect a sharp snapback in OCC."
According to DB analysts, domestic demand (U.S.) remains relatively stable at low levels and prices are flat. However, export demand has weakened and prices are down about $20-50/ton.
"In the wake of soft global demand, we think producers will have to take more than the normal winter downtime in order to maintain market balance," Wilde said. "We are currently assuming a $40-45/ton year/year containerboard price decline in 2012."
Pulp prices continue falling, DB noted. "Domestic producers have dropped November U.S. NBSK by $30/mton to $920/mton, and North American NBSK to China is down about $80/mton, month/month, for November," Wilde said.
"Hardwood is uglier," Wilde noted. "Trade BEK in China is at about $550/mton, down about $100/mton, month/month. Even at these low levels, customers are reportedly balking and pushing for prices as low as $460.
"On the road in Europe over the past week, we've found producers increasingly cautious about the next several months," Wilde concluded.
SOURCE: Deutsche Bank, Mark Wilde