United States

The North American market for recovered fibre is softening, with price declines over the past few weeks in almost all US geographic markets, especially in the case of OCC and mixed paper. This weakening is a first for 2025 as the previous four months had brought either higher or stable prices.

RISI’s editor/price reporter posted publicly on LinkedIn: “For the first time this year, prices for OCC decreased across almost all US regions as demand dips during spring maintenance and market-related downtime among the largest producers in the USA. Prices declined US$ 5-10 per ton in May, according to Fastmarkets’ monthly survey and pricing report published on May 5. Export prices for OCC, too, fell with demand and another month of tariff scares that put the ball in the buyer’s court for May orders.”

Domestic producers in the USA are backing off their orders and even trying to turn away contracted tonnage because their mills are slowing down owing to lower demand, and hence their recovered fibre inventories are high.

While the above public comment from RISI speaks to OCC, the same market trends apply to mixed paper and even SOP in some instances. Suppliers are saying the bottom has yet to be seen on pricing and are expecting levels to continue to deteriorate through May, creating nervousness among buyers and sellers.

So why is all this happening? In a word: tariffs. Consumer spending confidence has been dampened by employment uncertainty and rumours of inflationary pressure sparked by tariffs. We are beginning to see the realities of this consumer spending reduction, and the domino effect is having implications across the entire supply chain. Consumers spend less, leading to slower retail sales, leading to higher retailer inventories, leading to lower orders from retailers to manufacturers, leading to lower demand for paper packaging.

Recently, someone analysed the 20 worst shipping calendar quarters between 1996 and the opening three months of 2025. This year’s first quarter emerged as the 10^th worst for corrugated box shipments over this period of almost 30 years.

So the result is paper mill downtime and even permanent shutdowns. The past two months have seen the closure of two huge paper mills, one by International Paper and the other by Smurfit WestRock. And both are located in the south west of the USA in, respectively, Louisiana and Texas. These ceased operations add to a growing list of mills that have shut down in the USA over the past few years. Counterbalancing these declines have been new or resurrected mills over the past 24 months, built as greenfield paper mills or older or shuttered mills converted to 100% recycled containerboard paper mills, mainly by Domtar, Cascades, New-Indy and Pratt. However, it is doubtful whether these new mills have made up for the closures or downtime taken in this industry.

Also owing to the uncertainty created by tariffs, carriers have been cancelling a large number of import bookings in Asia. This means that vessels are not full when coming to the USA and so, eventually, this country’s exporters will start encountering issues with a lack of equipment.

As for other news relating to recovered fibre trends in the USA, Ryan Fox from Bloomberg Intelligence recently released the Bloomberg Green Markets recycling rate for OCC in 2024, placing it in a range of 63% to 68%. Meanwhile, major consumer brands are continuing to switch from plastic to paper-based packaging in line with consumer preferences, recently including Duracell and Energizer batteries, Oral B products and KIND snack bars. At the same time, the largest MRF operators such as WM (formerly Waste Management) and Circular Services/Closed Loop are continuing to open new MRFs or to make acquisitions.