OCC Markets Nearing Bottom?
 Print this article | Send to Colleague
In regard to the continuing drop in OCC (old corrugated containers) demand and pricing in the U.S., Mark Wilde of Deutsche Bank asks "are we nearing a bottom?" In August, he says, domestic OCC has dropped $20/ton to $97/ton (-$82/ton y/y). Prices have slipped below $100/ton for the first time in 32 months.
"We estimate that it costs ˜$40-$45/ton just to cover pick-up and handling costs on OCC. The biggest issue is weak demand in China and falling export prices. In August, export OCC to China was down $30/ton. In the short term, falling OCC may aid margins. However, containerboard producers may find it more difficult to pass-through announced price hikes if OCC and other inputs continue to moderate," Wilde explains.
|
|
