Prices for mixed paper and old corrugated containers (OCC) increased slightly in the November buying period, based on data tracked by Boston-based RISI Inc. U.S. average mixed paper prices inched up from $4.17 to $5 per ton, and average OCC pricing rose from $70.28 to $71 per ton.
Although overall prices increased slightly, several material recovery facility (MRF) operators say they think prices could decrease by the end of the year. One MRF operator on the West Coast reports that many Chinese mills are approaching their caps on permitted import volumes.
“Everyone is anticipating things coming down just slightly.” – a West Coast MRF operator
While China is importing kraft paper “like gangbusters” as of the second week of November, the West Coast MRF operator says those imports will decline before the end of the year.
Also, he says prices for recovered paper to non-China Asian countries, such as Indonesia, Malaysia and South Korea, have remained steady but lower than China’s prices.
Additionally, the West Coast MRF operator says many domestic mills have scheduled downtime this time of year, which also will have a slight impact on recovered paper prices. “Everyone is anticipating things coming down just slightly,” he says. “This is a typical time [of year] for that to happen.”
MRF operators say demand for recovered paper grades has been fairly steady for the past 30 days. “Mills are not really increasing their orders, but they are holding to their regular amounts,” says a MRF operator in the Upper Midwest, who primarily sells product domestically. “Also, brokers are making calls, so we know there are demands for high grades in office paper.”
Recovered paper grades remain in demand overseas, as well. A national recycler reports that India, Indonesia, Malaysia, Taiwan and Vietnam are buying mixed paper as of November; however, the recycler adds that these countries are beginning to place restrictions on this grade. With OCC, though, the recycler says demand is stronger.
The national recycler adds that residential single-stream OCC is more difficult to move than commercial OCC; but, compared with mixed paper, residential OCC “is still movable.”
With a national push to decrease contamination, the MRF operator in the Upper Midwest says she has noticed that the quality of materials sent to domestic mills seems to be improving lately. She says this is likely the result of MRFs investing in upgrades at their facilities to reduce contamination.
Others in the industry have seen similar trends nationwide. The national recycler says he thinks many MRFs will start to invest in their facilities to improve quality. In addition to facility upgrades, he anticipates some municipalities may transition to dual-stream recycling programs to create higher quality streams, or they will focus on reducing the variety of recyclables they accept in single-stream collection.
In addition to quality issues, freight and transportation have been growing concerns, as well. The MRF operator in the Upper Midwest says freight “has been tight,” adding that the company is paying slightly more to move material.
“Mills are not really increasing their orders, but they are holding to their regular amounts.” – a MRF operator in the Upper Midwest
One of the biggest issues with freight is the current driver shortage affecting many industries in the U.S. A representative from a national mill and recycler reports that recruiting new drivers has been very difficult and time-intensive.
“We just ran a driver open house at two of our plants,” he says. “We had signs up all over the place for it. The one [open house] had three people, and the other had four people come. We put time and money into that. It’s concerning.”
The West Coast MRF operator says his operations have also had issues with ports in Southern California this fall compared with the summer season. “We had a good summer and [port-related issues] seemed better, but the last couple of months were rough,” he says, adding that many ports have been making last-minute closure announcements, negatively affecting scheduled deliveries. “The optimism from summer is not there now, and we can’t control anything with ports.”