Commodity Report

The recovered paper market in general is picking up steam, with high grades having fared well this month. SOP (sorted office paper) prices have jumped $10, according to one New England recycler. Prices for white ledger and coated book have also firmed up, while mixed paper has remained unchanged.

According to two sources, there is talk in the industry of stricter standards and inspections on material being accepted in China. One West Coast broker reports that he has heard rumors of Chinese buyers proposing a revised standard that would reduce the acceptable amount of contaminants and out-throws, however nothing official has been announced. The West Coast source points out that such a change would be difficult because a large amount of the OCC (old corrugated containers) bound for China comes from material recovery facilities (MRFs), and the contaminants and out-throws tend to be higher.

Traditionally, the market slows down in the summer months as printers take vacation time and mills schedule downtime. However, sources report that this seasonal slump has yet to be seen. Generation of scrap paper has remained steady. The Fourth of July holiday slowed the market somewhat, one source says. However, he adds, "If the mills need materials, they’ll find a way to do it."

Recent scrap paper price gains have been led by OCC. Demand for the grade is strong domestically and overseas, with a general $5 per ton increase in the Midwest. Export prices for OCC are hovering near $123 per ton delivered to the harbor on the West Coast, sources say.

The market for old newspapers (ONP) has remained fairly unchanged since June, although sources in the Midwest and on the West Coast report a slight drop in prices and demand—particularly for No. 8 news.