OCC Prices Continue to Stagnate Predicting which way OCC prices will go is a fool’s game. Earlier this year many recovered paper industry veterans would have told you that the brutal winter weather we’ve been experi-encing and the continuing slow economic recovery would have led to skyrocketing OCC prices. Well, needless to say, that has not happened. Instead the past four weeks saw OCC prices stabilize. Both recovered paper buyers and sellers agree that this market is difficult to read. “Weather is starting to stabilize and does not seem to be a factor anymore,” emails a buyer on the West Coast. “Some suppliers are reporting better collections while others are reporting no improvement. While domestic containerboard mills are still full of inventory, they continue to pick up OCC…” China is now back from its New Year celebrations. Some board mills in this region are buy-ing but others are backing off. Why? China’s economy is on wobbly legs. The government is trying to hold down inflationary pressure by raising interest rates and tightening money supply. But after doing so for weeks, inflation isn’t under control. As food, energy costs, and housing are getting more expensive, consumers will cut their spending. This leads to less of a need for goods packaged in corrugated containers and less of a need for OCC. Chinese mills are sitting pretty with recovered paper inventory. In recent days export pricing has picked up, but it is too early to say if this is the beginning of a trend or just a natural recov-ery from the recent holiday period. Yet anther concern for China is higher fuel prices, thanks to the turmoil in the Middle East and Libya. At least one steamship line (Zim) is raising rates $400 per container starting April 1. This works out to a $15 per ton increase. Turning to the Southeast, you might think that Abitibi-Bowater’s recent decision to perma-nently close its lightweight linerboard machine at its Coosa Pines, Ala., mill would cause OCC prices in the region to drop. It didn’t happen. It turns out that suppliers to this mill had no prob-lem finding another home for those tons. Mill buyers throughout the country are definitely in a position to drive OCC prices down right now. But they’re not doing it. They know that it is just a matter of time before China has no choice but to jump into the U.S. market and buy more tons to supply all the new board mill projects starting up this year. Can you spell pins and needles? -MA

OCC Market ReportOCC Market ReportOCC Market ReportOCC Market Report

Taken from “Official Board MarketsTaken from “Official Board MarketsTaken from “Official Board MarketsTaken from “Official Board Markets————the Yellow Sheet”the Yellow Sheet”the Yellow Sheet”the Yellow Sheet”

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