<B>Low Grades Languishing</B>

Handlers of old corrugated containers continue to wait for a turnaround. There have been some signals earlier this year that a turn was “just around the corner.” However, with the middle of February now here, the expected come back in March may be pushed back a bit.

There was a sense that an improvement in the bulk grades would be led by a resurgent offshore move. However, the opinion that a change from inquiries to sales was imminent seems to have waned.

There still are some signals that offshore mills will be coming back into the market. This trend, however, doesn’t seem to be hitting with enough emphasis to cause any upswing in demand from domestic mills.

Enough mills are saddled with high inventories that demand for more raw materials have yet to transfer into better movement. On the East Coast a lack of any substantial firming in offshore orders is suppressing interest by mills in the Eastern half of the country.

Prices off the East Coast are now moving for around the $40 a ton FOB level. This low price will likely remain that way for the rest of this month. There is some question whether this price will move off this level by next month.

Markets in the South also are seeing some sluggish low grade markets. Enough downtime and slowdowns are taking place that increased orders are not picking up the slack.

Movement is still steady, although pricing continues to be an area of concern. Without any upward pricing mechanism it is unlikely that there will be a pickup in demand enough to get more material.

Several of the largest consumers of OCC in the South have been sending signals that they will not be very aggressive in their purchases during the first quarter of the year. While the strike threat at the Wilamette mill in Campti, La., has dissipated, several other board mills in the region are reducing their intake of material. This is diverting tonnage to other sources, adding to the overall slowness in the market.