August scrap prices tracked by Boston-based RISI Inc. demonstrate slight upward momentum for old corrugated containers (OCC) and mixed paper. While the increases amounted to little more than $1 per ton on average in the U.S., the incremental rise and other announcements may offer mild encouragement to paper recyclers.

The mixed paper grade, though it has crept away from having negative value in many regions, remains mired well below the pricing it enjoyed when China’s appetite for it was more voracious prior to late 2017.

The news on the mixed paper front was far from rosy in the summer of 2018, with several nations in Asia (including Vietnam, Malaysia and Thailand) expressing concerns about accepting too many shipping containers of paper and plastic scrap. Statements from government ministries in the region cited either clogged port facilities or worries that too many nonrecyclable contaminants were present in shipments.

For a free trial of RISI’s PPW Yellow Sheet pricing, please visit www.risi.com/rt.

That bad news was added to in the second week of August, when China’s latest round of goods facing tariffs as part of the U.S.-China trade dispute included recovered fiber.

Longer term, the mixed paper grade may be redeemable thanks to a series of investments in recovered fiber stock prep systems being made at mills throughout North America.

“Though consumers are ordering through Amazon, not all of that OCC is making its way into the recycling stream.” – a recycler in Texas

In July, Atlanta-based Georgia-Pacific disclosed that its “Juno Technology” for pulping scrap paper will soon be introduced at its paperboard mill in Toledo, Oregon. The company says the process has been designed to use fiber that is having difficulty finding domestic homes because of high levels of contamination and its mixed composition.

A newspaper in Oregon has reported that Georgia-Pacific hopes to use 300 tons of mixed paper per day at the Toledo mill.

Germany-based paper mill equipment company Voith made at least two announcements pertaining to the sale of stock prep systems this summer. One of those is for a Copamex mill in Anáhuac, Mexico, that is converting from printing and writing (P&W) paper production to containerboard.

Copamex’s new stock prep system will allow it to use OCC and mixed paper as furnish.

“By partnering with Voith, we’re working with the company that has the most knowledge in processing highly contaminated furnish, and this will assist us with successfully launching our growth in the containerboard and packaging markets in Mexico,” says Alonso González, CEO of Copamex.

*U.S. dollars per short ton for open market purchases by mills. Domestic prices are FOB seller’s dock for delivery in August as reported by RISI’s PPW Yellow Sheet Aug. 6, 2018, while export prices are FAS port of origin. New York includes ports in northern New Jersey, and LA includes Long Beach and LA ports. Prices used with permission from PPW Yellow Sheet. Free trial at www.risi.com/rt.

The new Green Bay Packaging mill being built in Wisconsin also will have a Voith stock prep system that will allow it to use OCC and mixed paper. That plant will produce packaging board at a rate of nearly 4,000 feet per minute.

On the supply side, recyclers report a fairly healthy summer in terms of generation, with a few seasonal fluctuations. “Fiber generation has stayed steady, and industry is doing well in this region,” says a recycler in the upper Midwest.

She adds that most of her company’s fiber is shipped domestically, which, “has been good for us during this crazy [export] market time.”

“Fiber generation has stayed steady, and industry is doing well in this region.” – a recycler in the upper Midwest

A Texas-based recycler says, “Generation has been a little softer in July and so far in August,” with “less OCC being generated at retailers.” He says the shift away from in-store retailing toward home delivery is a source of concern. “Though consumers are ordering through Amazon, not all of that OCC is making its way into the recycling stream.”

The recyclers say freight-related headaches refuse to go away, with the Midwest source saying harvest season will cause added complications.

The Texan says the August rise in prices might even be attributable to freight woes. “With mills not being able to receive fiber in a timely manner, they are paying a little more to receive extra blocks of tons to build inventory.”

Recycling Today‘s Paper & Plastics Recycling Conference this October includes a transportation session. Visit www.RecyclingTodayEvents.com for details.