Recycled cardboard prices reach record-breaking highs

US old corrugated container (OCC) or recycled cardboard prices have continued to climb for eight of the last nine months. June has seen the largest hike since September 2016, jumping $37/ton for export OCC. In fact, this month’s containerboard price hikes have beat out monthly increases recorded by Pulp & Paper Weekly over the last 13 years! Over the last 9 months alone, export OCC values have risen $87/ton- a notable increase considering the $46/ton fall in April. Currently, export OCC is fetching prices as high as $290/ton at China’s main ports. Exporters anticipate pricing to increase further to as much as $295/ton at the same ports. Suppliers are even fetching higher prices at domestic mills as export hikes have caused modest increases of OCC per ton values between $5 and $25 depending on the coastal region.

US suppliers could continue to fetch favorable prices from domestic buyers, as there are numerous indicators that US mills may continue to pay higher prices:

  • The 4th of July falls on a Tuesday this year, meaning a long holiday weekend and lead times as long as 5 days. Mills are rushing to buy extra stock in preparation for July’s delivery delays despite building sufficient inventory in March and April.
  • Even some of the top 10 US containerboard mills have jumped to secure cardboard supplies. One has committed to paying $50 over recorded May price levels, while another committed to paying $40 over.
  • It appears domestic and foreign mills will be vying for stock from the US OCC pool, which is expected to hold higher price levels steady. Suppliers expect to fetch competitive prices over the coming months. One exporter even claimed some domestic buyers are willing to match export prices as China vies to replenish their inventory.
  • China is not the only competition for US mills. Mexican mills appear to be paying $60 over recorded market prices.

A breakdown: what is behind these record breaking OCC price hikes?

  • Higher containerboard pricing in the US and China.
  • The “Amazon effect”: more and more shoppers are purchasing goods online that require shipping.
  • Despite increased business to consumer shipping, residential cardboard box collection has fallen.
  • Dramatically lower OCC inventory levels at US mills.
  • China’s National Sword program, which intensified import inspections of mixed paper. Strict quality standards for mixed paper and old newspaper (ONP), which plummeted said materials’ values, is said to have driven Chinese demand for OCC.

Though both domestic and foreign OCC market prices are favorable to suppliers, exporters remain wary that they may be setting themselves up for another crash. The jarring OCC hikes are incredible: while increases on recovered paper (RCP) materials appear across the board, no other RCP stock has seen price surges as great as OCC, which is currently raking in a price per ton 71% higher than that seen since this time last year. Suppliers should also keep their guard up as they may confront resistance from buyers, such as mills in India, as producers grow wary of expensive inventory acquired at additional costs that may not be recoverable from downstream buyers.

Berg Mill Supply provides information on recyclable material market trends to help waste generators:

  • gauge the highest value for their recycled materials based on global pricing trends.
  • predict demand for recyclables based on market analysis.

If your business generates or handles waste in large quantities, contact our recycling industry veterans at Berg Mill Supply! We offer more than just pricing info. Our consultants can help you streamline your waste process to maximize profits and introduce your products to traditional and niche markets worldwide.