<b>Domestic Slowdowns Hampers OCC Markets</b>

Old corrugated container markets may be close to a bottom, although most paper stock dealers don’t seem much of a bounce in the near future. Continued difficulties with board mills throughout the country have hammered OCC over the past several months.

Questions that are now arising include some growing concerns about how low OCC can go before more of the material is diverted from end markets to landfills. At the same time, board mills continue to report slowdowns in production. According to several sources Visy Paper’s Staten Island, N.Y., mill is not taking any material, which is adding to the overall problems.

A number of other board mills in the Northeast are sharply cutting their intake of recovered fiber. These board mills continue to create tremendous problems for handlers of the grade.

In the South, there are concerns that finished product prices could sink even further. With the slide in finished products, collection levels have been declining. A number of paper stock dealers report a number of grades seeing a sharp drop in the amount collected. This is creating more problems for enough operators.

It doesn’t appear that offshore orders will come in to the market over the next several weeks to bail out domestic markets. Many exporters are hoping that stronger orders will be coming in from China. However, there doesn’t appear to be much incentive for purchasing more fiber for China. Whether prices stabilize at these low prices, it is not likely that any jump in export orders will take place.

Mixed paper is one of the few grades that is holding up. Prices aren’t strong, although movement continues to be steady. This improvement is being attributed to steady buying by insulators and homebuilders. With new housing starts still strong, orders from enough areas are allowing for better movement of the material.

Although the grade is decent at the present time there seems to be a growing belief that the downward pressure being felt by many of the other grades will spill over into softer markets for mixed paper in the near future.