Domestic U.S. Demand for OCC Continues Strong Streak

According to a report published this week by Midland Paper, Wheeling, Ill., USA, Domestic demand in the U.S. for old corrugated containers (OCC) continues its strong streak, while pricing for the brown grade in July hit a nearly four-year high for a one-month price increase.

A recovered fiber buyer in New Jersey said in the Midland report that there has "definitely been an increase in OCC" related to both generation and demand. "Domestic demand is very strong right now; it’s out of control," the East Coast-based exporter said. "Prices and demand for OCC are off the charts." 

Boston-based research firm RISI’s August  5 Yellow Sheet reports pricing increases for OCC of up to $10 per ton domestically and up to $25 per ton for exports from the month prior in light of lower generation, as well as from a combination of "intense export demand from China and steady-to-strong domestic mill buying," Midland Paper reported. Export levels increased to $178 per ton FAS (free alongside ship, meaning the seller must deliver goods to a named port alongside a vessel designated by the buyer) at the Los Angeles/Long Beach ports and $170 per ton FAS at New York/New Jersey ports, according to the August 5 Yellow Sheet.

The buyer cites an uptick in buying from China as a factor for the pricing increases. Throughout the beginning of this year, domestic mills were buying more tons than China, he said. "But China is back in as well, and the two of them are fighting for the same tons, which has caused the prices to really soar," the exporter said.

While he says his company expected a strong summer, it didn’t anticipate prices would climb so high in July. "One has to wonder, can we see prices take a huge jump in August as we saw in July? It could happen," the broker noted.