OCC Prices Reported Notable Decline for Fifth Month in a Row

SEATTLE (Scrap Monster): The latest edition of the PPI Pulp & Paper Week indicates extremely poor conditions for recovered fiber market, with prices hitting fresh lows. Indicators suggest that old corrugated container (OCC) prices registered fifth straight month of decline in May this year. The per-ton price of OCC plunged to $30 during the month, notes PPI Pulp & Paper Week.

The domestic price for high grades such as sorted office paper (SOP) recorded average decline by $20 per ton in most regions. As per sources, there are high chances of further fall in high grade fiber prices.

The extra downtime at many mills suggests lack of activity, sources said. The load intake by containerboard mills have seen significant decline, as production is being strictly restricted to the demand. The mills are cautious in building inventories, as the market is currently going through the most challenging conditions in several years.

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The weakness in export markets has added fuel to the fire. For instance, China has drastically reduced import permits for recovered paper. The country’s permit quota for recovered paper imports are likely to drop to nearly 12 million metric tons in 2019. The reduced intake by export markets has resulted in oversupply of most grades of recovered fiber at domestic mills.

The adverse market conditions had led to temporary suspension of paper recycling by Kentucky City, which in fact has affected several municipalities surrounding Lexington in central Kentucky.