Chinese demand for
In addition, in the domestic market, pricing for all the major secondary fiber grades had sizable gains on the West Coast. OCC saw substantial price surges of $45 per ton out of Long Beach/Los Angeles and of $50 per ton out of the Pacific Northwest, according to the Nov. 6 PPW Yellow Sheet from Boston-based research firm RISI.
Sources say shipping to China is still “risky.” Yet, OCC prices to China increased by $53 to $58 per ton FAS (free alongside
In other record-setting scenarios in October, mixed paper hit its lowest-ever price of $28.06 per ton. This has been followed
A Midwest-based recycler says with pricing for the West Coast tied to export demand, it’s no surprise pricing for both grades bounced back. Export, he says, is rebounding.
“Competition for materials was sloppy in September and most of October,” says the Midwest-based recycler. “This has turned around in November and will accelerate through the new year. Domestic mills on the West Coast need to be competitive with export to obtain materials.”
On the other hand, the recycler says some mills don’t believe there will be a fiber shortage and “are behaving as if export will not be a factor.” He reports that one mill he works with has limited its recovered fiber purchases to contract tons. Another mill, which has
While domestic demand is good, sources say many U.S. mills are full and
A buyer based on the West Coast says it is a “wait-and-see situation” as to how the news coming out of China will play out. In the meantime, he says, other overseas markets have ramped up their buying of recovered fiber. The recovered paper trader says having alternative markets to sell to, notably Southeastern Asia, has been helpful.
“Dollar for dollar, I’d rather ship it to a different market and keep my fingers crossed than ship it to China,” says the buyer. “China is still going to be an important market for mixed, but it’s nice we now have some alternatives.”
Demand from other Asian markets, including India, remained firm to strong, reports Ranjit Baxi, president of the Brussels-based Bureau of International Recycling (BIR), in the organization’s October 2017 BIR World Mirror on Recovered Paper.
“Exporters are now looking forward to 2018 and asking where the economy is heading and how to mitigate the looming fiber export risks,” Baxi writes. “Exporters want to know whether Chinese mills’ import allocations for 2018 will be maintained at 2017 levels or reduced. Most markets believe a 25 percent reduction to be a possibility, which would make 2018 a very trying and testing year for fiber exporters to China,” he adds.