PaperAge Magazine

US: Mixed Paper Prices Plummet, OCC Prices Down Too, Oversupply Persists

paper recycling A material recovery facility (MRF) operator based on the East Coast reports that he has "thousands upon thousands" of bales of mixed paper stored in two plants as slow buying from China continues.

March 21, 2018 (Recycling Today) - Facilities in the United States are overflowing with mixed paper as prices for this grade and for most recovered fiber grades plummeted in February. A material recovery facility (MRF) operator based on the East Coast reports that he has “thousands upon thousands” of bales of mixed paper stored in two plants. “We're just putting it in every corner we can,” he says.

China has sustained its slow buying of U.S. secondary paper. The lack of orders has created an oversupply of mixed paper in the U.S., with prices plunging. The price out of Chicago to China is $0 per ton FAS (free alongside ship, meaning the seller must deliver goods to a named port alongside a vessel the buyer designates), according to the Feb. 5 PPW Yellow Sheet from Boston-based research firm RISI. Mixed paper prices dropped by $47 per ton FAS from this same port. Old corrugated containers (OCC) also saw a dramatic price drop for exports to China, falling by at least $30 per ton FAS.

“At some point in time in the next 30 to 60 days, prices are going to go up because [China is] going to need the corrugated,” the MRF operator says.

The Chinese government issued another 1.11 million metric tons of import licenses in the first quarter, according to RISI's PPI Pulp & Paper Week. At this rate, 2018 import demand in China will be down 35 percent compared with the 2017 import totals, the publication notes. Forty-five mills have received import licenses so far in the first quarter of 2018, with 20 mills having been part of the latest round of batches, PPI Pulp & Paper Week reports.

As part of China's Ministry of Environmental Protection (MEP) releasing a batch of early 2018 scrap materials import quotas, 96,000 metric tons of material were issued to a Nine Dragons Paper (Dongguan) Co. Ltd. facility in south China. Notes attached to those two quotas indicate permission or instructions to “change ports” or “change the mode of trade for general trade.”

The 26 paper import quotas total 272,000 metric tons in volume. That represents just 0.9 percent of the 29.2 million metric tons of recovered fiber imported into China in 2015.

PPI Pulp & Paper Week also reports . . .

Go to the full story, which includes pricing charts, at Recycling Today's website:

SOURCE: Recycling Today