Paper Mills Foresee Continued Surge in OCC Prices

The recovered fiber costs too were up in 2020.

SEATTLE (Scrap Monster): Major paper mills have signalled further surge in recovered fiber prices, mainly due to strong demand for corrugated packaging and ongoing pressures created by the Covid-19 pandemic.

The OCC prices have been witnessing a dramatic surge since early 2020, which extended for several months. As announced by packaging giant Sonoco, the OCC prices had averaged at $71 per ton during the previous year. The company expects further surge in prices, to average at around $90 per ton in 2021.

The recovered fiber costs too were up in 2020. For instance, WestRock Company reportedly witnessed $36 per ton rise in costs throughout the previous year. The company also reported 3% to 5% surge in container freight costs, primarily as a result of the pandemic. The rise in costs drove prices higher. A majority of companies, in their outlook, have stated that fiber costs are expected to rise further in 2021.

Massive Supply Shortfalls Drive OCC Prices

According to Ward Dickson, CFO, WestRock, the recycled fiber costs will potentially increase $15 to $20 sequentially from Q1 to Q2 this year. Furthermore, it may increase by $5 per quarter in the final two quarters of the current year.

International Paper also expects overall OCC prices to increase by $15 to $20 per ton in Q1 this year, compared to Q4 last year.