U.S. Recovered Paper Inventories Remain High, Pricing Flat

 

Thus far this year, recovered paper prices have been generally flat, as U.S. mills continue to supply the domestic market with inventory, according to a recent article by Recycling Today magazine, based on information presented by speakers at the Southeast Recycling Conference and Trade Show (SERC), recently held in Destin, Fla., USA.  

The Recycling Today report cited Michael Hoffman, managing director in the diversified industrials sector, covering environmental services for Stifel Financial Corp., a St. Louis-based brokerage and investment firm, who provided an overview of "The State of the Waste Industry," where he discussed how paper prices remained flat three months into 2016, "but still less than in 2015." 

 

Pricing for mixed paper and OCC was flat in all domestic regions, except in the Pacific Northwest, which increased $5 per ton from the prior month. Old newspapers (ONP) pricing also remained stable in all U.S. regions month over month, with the exception of the Southeast and Los Angeles/San Francisco regions, which saw a $5 per ton increase, the Recycling Today article reported.

 

Hoffman noted that "little brown boxes" in the waste stream continue to increase, and he questioned how the industry could better collect OCC for recycling. "How do we economically catch the value of these goods?" Hoffman asked the audience. 

Citing RISI, Boston, Mass., the article reported that corrugated box shipments in the U.S. showed modest growth in February. RISI, in its report, referenced Fibre Box Association (FBA) data showing that box shipments increased 5.6% from a year ago but were only 0.6% higher on an average-week basis. 

U.S. containerboard mills ran at 95.1% capacity rate in February, according to the AF&PA (Washington, D.C., USA), which is nearly unchanged from 95.2% in January. However, the domestic market remains in oversupply regarding finished box inventory. 

A California-based exporter said that "for the mills, I think they try to push on the production volume-wise. However, the box plants cannot sell that much." 

Consumption of recovered fiber parallels the strength of the U.S. economy, a Midwest-based broker said, and, according to several of the SERC speakers, the nation’s economy is improving, Recycling Today reported.