Mixed paper, OCC prices end year on downward trend

Last year ended with some cautious optimism around demand trends, particularly with packaging grades made of recovered paper, but price trends for mixed paper and old corrugated containers (OCC), especially, leave much to be desired.

According to the Dec. 5 edition of Fastmarkets RISI’s PPI Pulp & Paper Week, lower recovered paper prices in the United States persisted into December as lagging demand and increased generation into the holiday season combined to push prices down.

OCC prices have decreased for six months straight, while mixed paper pricing has fallen for the last three months.

OCC pricing averaged $66 per ton in the U.S. for December—the lowest it has fallen all year—and is down nearly 11 percent from November’s $74-per-ton average and nearly 17 percent year over year.

Mixed paper—a grade that has seen its relevance debated recently as material recovery facilities produce cleaner bales of other recovered paper grades—also fetched its lowest price per ton of last year, averaging $37 per ton. That price is down nearly 16 percent from November 2024 and 5.1 percent year over year.

Both mixed paper and OCC pricing peaked in the summer, with mixed paper reaching an average U.S. price of $70 per ton in June and July, while OCC topped out at $106 per ton in June.

The lower prices reflect continued soft-to-flat box demand in the U.S.

According to Ryan Fox, corrugated market analyst at Bloomberg Intelligence, box shipments in 2024 will be just 1.5 percent higher than box shipments in 1994.

“The corrugated packaging industry hasn’t really seen any substantial growth,” he says. “In 30 years, we haven’t seen real growth; we’ve seen a transformation of growth.

“We’ve been offshoring so much of the production of our goods to China and Thailand and India … and that’s kind of been the differentiator. Demand is relatively flat on a 30-year timeline, and we have all these imported goods, and now we have to ask ourselves, ‘What is the broader global economic climate like?’”

He says, “It’s not good,” citing a global slowdown brought on by rampant inflation.

According to Fox’s data, the U.S. exports 500,000 tons to 600,000 tons of finished containerboard to China per year. However, China also imports 2.5 million tons of pulp and paper from Russia—what Fox calls “conflict paper.”

“Now, if China has access to virgin pulp and paper to the tune of 2.5 million tons, why in the world would they spend similar money to get recycled stuff?” he says. “Now, [the U.S. doesn’t] send as much OCC into China anymore; it’s got to be processed. But we’re still seeing that broader slowdown even in some of the other countries because this is a global economy.”

The potential International Longshoremen’s Association (ILA) strike also could further affect the soft demand landscape predicted in the first few months of the year.

“We are likely going to see some softness in the near term,” Fox says. “Softness in the export market creates excess supply domestically, and excess supply typically brings prices down, at least for OCC.

“January is typically an OK time, but it’s going to be [about] how does the perceived demand for containerboard at the mills line up with the available supply? What does that look like? And what does that do to price? Then, in that bigger global context, what's happening globally? You’ve got the [possible ILA] strike, you’ve got more of a global soft economy, you put all that together, and what does it look like? We still think that there’s going to be some softness. We may not see prices for OCC come down $10, but we don’t think it'll go up in January.”