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North America

US recovered paper generation remains slow on virtually all markets across the country. So even though paper mill capacity utilization is still a little sluggish, prices for recovered fibre are ticking up domestically. Recovered paper sellers are having no problem getting orders from both domestic and export buyers; this is particularly true for the major bulk grades of OCC and mixed paper. 

Low generation is highly typical for this time of year as the school term ends and families go on vacation, leading to more spending on services such as travel rather than on goods which come in boxes. However, some reports state that generation this year is even lower than usual.  

Despite continuing sluggish demand, this low generation has mills worrying about adequate supplies. They feel they are competing for fewer and fewer tons, and so this means prices are ticking upwards. An executive at Fastmarkets/RISI stated recently on LinkedIn: “New recycled PMs (paper mills) seek more OCC, hiking up prices for third straight month with stunted supplies. Pricing and premiums picked up in June for US old corrugated containers (OCC), new double-lined kraft corrugated cuttings (DLK) and even mixed paper as domestic generation remained stunted, and recently-started recycled containerboard and packaging paper machines searched for supply.” And so three key factors are mentioned here: stunted supplies, new paper mills or paper machines, and prices rising for a third straight month.

From an export standpoint, there have been ocean freight reductions and little or no issues with ocean logistics. 

Tissue mills seem to be struggling for sales, creating an abundance of higher grades inventory, especially in the US Midwest. An oversupply of virgin pulp is having an impact on the high grades of recovered paper used as pulp substitutes because these prices move upwards or downwards together. One seller wrote to me saying sorted office paper and coated book prices were “in a nosedive” - a term I have not seen used for recovered paper prices in many months, especially for the high grades.

As for the future, Fastmarkets/RISI noted that International Paper and WestRock were projecting recovered paper growth of 4.6% in 2023. Fastmarkets/RISI stated that packaging competition continues “amid shifts from plastic to paper”, with mills continuing to “seek out more old corrugated containers (OCC) and mixed paper, among other recycled grades, to meet the growing demand for fibre-based packaging”.

So what does all of this mean? While the corner hasn’t been totally turned in favour of robust recovered fibre demand, there is some upward movement on price and optimism for the future. Maybe we can finally say that there is light at the end of the tunnel and that some good times lie ahead.