Recyclers across the U.S. have noticed an uptick in demand for recovered paper.  

“Everyone is begging for more cardboard and mixed paper,” says a material recovery facility (MRF) operator based in the South. “It seems like mill inventories are low, and they are crying that they need this material. It’s why we saw an increase in prices month over month.”  

The MRF operator adds that demand for sorted office paper (SOP) is a little soft compared with demand for old corrugated containers (OCC) and mixed paper. He says, “Mills will take as much OCC and mixed as we can produce. Everyone is reaching out, trying to get paper where they can get it, and that’s why we’re seeing prices increase.”  

He continues, “I think we’ll see prices jump again in July. And I don’t expect this will level out in one month. This is great, by the way. The prices increasing and demand increasing are a good thing for us.”  

According to the latest information from Fastmarkets RISI’s PPI Pulp & Paper Week, the national average mixed paper price in the June buying period is about five-times higher than it was one year ago, while the national average OCC price broke the triple-digit mark as of June.  

Dan Kurtz, director of recycling for Waste Connections, The Woodlands, Texas, says he’s noticed “quite a bit of demand” from mills in the Midwest.  

“Pricing is strengthening,” he says, noting that OCC pricing is within a good range and mixed paper pricing is following behind. “We’re definitely excited about the trajectory we see there and the continued demand for material from mills that are in the Upper Midwest and Midwest.” 

Kurtz says additional recovered paper consumption by Green Bay Packaging, ND Paper and Pratt has helped increase demand for those commodities in the Midwest in recent years.  

While recyclers say recovered paper generation has been steady in recent months, demand seems to be outpacing supply.  

“There’s plenty of demand and a lack of supply,” a broker based in the Midwest says.  

He notes that major fires at Friedman Recycling in Phoenix on the West Coast and at a Waste Connections MRF in Plainfield, Illinois, in the Midwest might have taken some tons out of the market in recent weeks.  

Kurtz of Waste Connections adds, “We lost that MRF. We’re continuing to try and look for ways to protect our facilities from hazards on the inbound side.”  

The broker adds that most commodities appear to be in demand across the globe right now, with manufacturing ramping up this summer from the slump in 2020. He adds that domestic prices for recovered paper are trying to compete with export prices, increasing in the June buying period. The broker says he suspects pricing in the domestic and export markets “will continue to chase each other” as long as demand is strong. 

The MRF operator based in the South adds that movement of materials is easy as long as you can get trucking or shipping. But trucking is expensive, and shipping is challenging right now. 

“Trucking isn’t entirely difficult,” he says. “It’s just expensive since you have to pay a premium to get drivers or pay someone else to haul materials.”  

“Trucking is scarce,” Kurtz adds. “Finding trucking to move materials is a struggle every day. We are fighting that minute by minute to get our materials moved.”  

During the Bureau of International Recycling’s (BIR’s) World Recycling Convention in early June, panelists during the Paper Division meeting talked about how export markets are very critical for recovered paper recyclers in Europe, but that shipping has been expensive in recent months.  

Ranjit Baxi of U.K.-based J&H Sales International said freight costs have risen three to four times higher than they were 18 months ago. He said this has made the trading business “very, very difficult.” The pandemic likely has exacerbated freight shortages, Baxi said, adding that he suspects that freight-related issues could normalize by 2022 if pandemic-related concerns ease.

Megan Smalley

Source: https://www.recyclingtoday.com/article/recovered-paper-update-june-2021/