Paper Mills Foresee Continued Surge in OCC Prices

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.

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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.