OCC SHOWS STRENGTH
The recovered paper market in general is picking up steam, lead by old corrugated containers (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 around $123 per ton delivered to the harbor on the West Coast.
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.
High grades have fared well this month, with SOP (sorted office paper) prices jumping $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 of material being shipped to 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 bound for China comes from material recovery facilities (MRFs), and the contaminants and out-throws tend to be higher.
Traditionally, the market slows up in the summer months as printers take vacation time and mills schedule downtime, but sources report this seasonal slump has yet to be seen. Generation of scrap paper has remained steady. The Fourth of July holiday in the middle of the week could slow the market up, one source says. However, he adds, "If the mills need materials, they’ll find a way to do it."
(Additional news about paper recycling markets, including breaking news and pricing, is available online at www.RecyclingToday.com.)
FEEDING THE PAPER DRAGON
As the manufacturing sector continues to boom in China, record amounts of recovered fiber are being exported there to help produce boxboard and other paper.
A presentation by Ranjit Baxi of J&H Sales International Ltd., London, at the Paper Division meeting of the Spring 2006 Bureau of International Recycling (BIR) Convention detailed the jostling for Chinese scrap paper market share that is taking place.
In 2005, Western European shippers picked up an additional 5 percent of market share, gained at the expense of North American exporters. But North America remained the number one exporter of recovered fiber to China, with its nearly 7.5 million metric tons representing 44 percent of the market.
But last year, Europe sent nearly 5 million metric tons to China, for 27 percent share, up significantly compared to the 2.7 million metric tons it shipped in 2004. Japan and Hong Kong have held steady with a combined 23 percent market share, but the overall growth of Chinese demand still meant that an additional 1 million metric tons flowed from there.
According to Baxi’s figures, so far in 2006 North American shippers have regained some market in what is proving to be yet another record year for paper making in China.
Exporters to India may need to pay attention to new maximum container weights being issued by authorities in the Mumbai area, who are responding to damaged roads caused by heavy trucks leaving the port area, Baxi says.
More good news for recyclers and exporters is expected to arrive in the form of lower freight rates throughout the rest of this decade, as a significant amount of new ocean-going vessel capacity will be put into place in the next four years.
The BIR World Recycling Conference took place at the China World Hotel in Beijing May 29-31.
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