Waste Today Magazine, in a recent article, stated that "domestic recovered paper demand stayed strong in September."
The article went on to state that "Adam Josephson, managing director of equity research at Cleveland-based KeyBanc Capital Markets Inc., says demand for boxes that has persisted since last summer is driving strong OCC demand.
OCC prices are very much tied to domestic box demand. Domestic box demand has been strong since last June, but it took a while for that box demand to be reflected in OCC prices," he says, adding that OCC prices have escalated for the past 11 months and are now at the highest point they have been in several years.
The historically strong box demand has led to a surge in OCC demand, which is why OCC prices are near historic highs, Josephson says.
Containerboard mills that consume OCC have been busy this year, but they also are dealing with substantial cost inflation. He says all the major containerboard producers implemented price increases three times this year. Containerboard prices have risen by almost 23 percent in less than a year, Josephson adds.
Containerboard prices rarely rise so dramatically in such a short period of time, he says. And it's possible that producers could attempt yet another price increase later this year. ... Demand remains good, supply chains remain effectively broken and cost inflation for containerboard producers appears to be intensifying as each month goes by, particularly for those that use a significant amount of recycled fiber.
Domestic demand for recovered paper has fared better than export demand in recent months. The broker based on the West Coast says mills in Southeast Asia have slowed down their orders lately."
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Helen Roush is Executive Vice President of Paperitalo Publications.