OCC resurgent - Paper - old corrugated containers - Brief Article - Statistical Data Included

Recycling Today, July, 2002

The market for old corrugated containers (OCC) has been surging, with prices moving up almost weekly during the past several months. For many processors, the strength in the market has been enough to put much of the negativity of the past two years behind them.

A combination of sharply lower inventory levels, better than expected demand, sustained offshore orders and limited supply has helped propel OCC to price levels not seen in several years. Most packers and brokers feel that the strength in the grade has the legs to last for several more months. In fact, some vendors feel that markets could carry through the end of the year before there is any slowdown.

Reflecting the strength in OCC, most of the larger paperboard producers have announced higher prices for their finished product. These mills have cited higher raw material prices (OCC) as the reason for the price hike.

Inventory levels have fallen precariously low at some mills, with the July 4th holiday a time when some mills are threatened with running out of material.

The shortage of the grade has led more mills to start taking in greater amounts of mixed paper as an extender or replacement for the OCC.

(Additional news on paper markets, including breaking news and pricing, is available at www.RecyclingToday.com.)

U.S. Producer Price Index/Mixed Paper

* Index based on 1982 average prices as 100

Paper

May 2001          171.9
June              169.4
July              172.1
August            172.2
September         174.5
October           174.6
November          174.7
December          175.1

January 2002      174.3
February          175.3
March             175.8
April             227.1
May               262.2

Source: U.S. Bureau of Labor Statistics