Domestic Strength

Throughout the past several years, U.S. paper stock dealers have found growth opportunities in the Chinese market. However, more recently, the domestic market appears to hold promise for a number of paper stock grades.

Prices for bulk grades, such as old corrugated containers (OCC), old newspaper (ONP) and mixed paper, have been rallying in the domestic market during the past several months, with a number of U.S. board mills becoming more aggressive in their orders.

Also affecting export orders is a May 15 freight rate increase. It will add roughly $5 per ton to the cost of offshore orders. This increase follows one that went into effect April 1.

Despite the upswing in domestic demand for low grades, pricing has seen only modest improvement and is still off from prices seen in 2011.

According to pricing data from Official Board Markets, pricing for sorted office paper (SOP), another of the low grades, has remained stable across all regions from April to May.

Higher grades do not seem to be enjoying strengthening demand or higher prices. Deinking grades, coated book stock and ledger grades are struggling because of reduced buying from a number of larger tissue mills in Mexico. That country has been a key end market for many deinking grades during the past several quarters. However, more recently Mexican mills do not seem interested in increasing their orders for deinking grades in light of softer orders for their finished products.

(Additional information on secondary paper markets, including breaking news and consuming industry reports, is available from SDB’s sister publication Recycling Today at www.RecyclingToday.com.)