Still stable with some slips

While exports of most recovered fiber grades are “terrible right now,” according to a Midwest-based broker, other sources say domestic demand remains flat. Prices in the United States for mixed paper, old corrugated containers (OCC) and old newspapers (ONP) were stable across the board, while sorted office paper (SOP) in the Northeast region was at its lowest level in nearly two years for domestic mills, according to Boston-based research firm RISI’s PPI Pulp & Paper Week’s pricing survey. SOP declined $5 in the Northeast, Midwest and Southeast and dropped $10 in the Southwest, according to the pricing survey.

The Midwest broker says a “double whammy” has occurred regarding exports to China as the country’s economy “is well-documented as slipping and slowing down” in addition to sourcing its own scrap paper grades internally. He says his company’s net exports to China are down month over month and year over year as the country purchases less U.S. recovered paper.

Additionally, Mexican mill are not buying recovered paper as they are full, he says.

“Right now [paper mills in] the Southwest and Southeast [U.S.] are full of paper, and Mexico is full and not taking any more,” the broker based in the Midwest says.

An oversupply has contributed to this lack of demand, the broker says. He adds, “It’s in a strong buyers’ market, and consumption is not keeping pace with the supply.”

However, the broker says, “We’ve had more demand for pulp subs and double line and decreases in printers mix and office pack.”

Export prices for OCC, ONP and SOP declined in every region reported by RISI, while mixed paper saw a decrease in export prices from the West Coast region, according to the pricing survey.
 

The outlook for OCC may be brighter in the long term, however, according to a new report, “OCC/UKP Market Analysis and Outlook,” released by RISI. The 15-year forecast predicts that OCC availability “may become a significant issue again in the future—as we saw in 2011 … [as] the global OCC recovery rate will have to climb even higher to support additional capacity in the recycled containerboard segment.”

At the 2015 Paper & Plastics Recycling Conference, hosted Oct. 14-16 in Chicago, members of the Paper Stock Industries (PSI) Chapter of the Institute of Scrap Recycling (ISRI), Washington, described a trial the group conducted of domestic OCC versus foreign OCC. The group encouraged attendees to try a similar trial as PSI found that domestic OCC “ran very consistently.”

In addition, PSI introduced two new recovered paper grades that derive from single-stream material recovery facilities (MRFs): sorted clean news (SCN) and sorted residential paper (SRP). SCN replaces No. 9 news, according to PSI, and is “paper going off the end of the line.” SRP is nearly the same as sorted mixed paper; however, brown grades are not removed from the mix.

The PSI also introduced two new mixed grades: sorted mixed paper and sorted hard mix, which consists of OCC, other brown grades and grocery bags, boxboard cartons and household papers. Sorted mixed paper consists of all paper and paperboard of various qualities with prohibitive materials now allowed to exceed 2 percent.

Kari Talvola of Fibre Trade Inc., a speaker during the PSI specifications session at the Paper & Plastics Recycling Conference, clarified that these grades “are a guideline. This isn’t set in stone.”

PSI discussed nine steps it must take to complete grade changes, and PSI is at step No. 9, which is to receive approval by ISRI’s board at the ISRI Convention & Exposition in Las Vegas, April 2-7, 2016.

Johnny Gold, president of The Gold Group Recycling Consultants LLC and another panelist during the PSI session, told PSI members that hearing from them is essential in deciding grade specifications. “We’ll keep taking feedback until we get this right … Only active member companies will be able to vote on adopting changes.”