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As the fall season continues, national paper mills maintain strong business to meet global containerboard and packaging needs. In late October, many paper mills, including Sonoco, Graphic Packaging International and International Paper, said they expected strong seasonal demand for corrugated packaging for the rest of the year.

While national paper mills were functioning well in early November, factories in Southeast Asia were experiencing downtime. As a result, export demand for recovered paper, particularly from Southeast Asia, remained weak during the November purchasing period. As a result, more material recovery facility (MRF) operators, paper packers and recovered paper traders were trying to sell their tonnes to domestic consumers rather than overseas buyers.

With over tonnes of recovered paper sold in the United States, some national paper mills have full inventories of recovered paper this fall.

“The paper mills are doing very well,” says a buyer based in the South. “If they weren’t functioning well, they would be inundated with supplies. ”

She adds that many of the tonnes that were previously destined for export markets remain in the United States, which is part of why supplies of recovered paper from mills appear to be high in early November. “Most of the factories are full in terms of inventory,” says the buyer. “We currently have the highest inventory we have had in 10 months. We do not anticipate any issues to maintain supply during the holiday season.

A Midwest-based MRF operator said the factories it sold to “weren’t screaming for tons” in November.

“The mills are pretty well saturated,” he says. “Usually at this time of year they ask for extra tons to spend Thanksgiving, but nobody asks for that.”

Domestic and export prices for most recovered paper grades declined during the November purchasing period due to high inventories at domestic mills and lower export demand.

Throughout the summer and the first half of fall, paper mills paid higher premiums to secure recovered paper, especially old corrugated cardboard (OCC) containers. But recyclers and brokers say those premiums will start to drop or disappear as prices drop and demand weakens.

“Prices are starting to drop,” says operator MRF. “The premiums are soaring. All those guys who said they got $ 75 bonuses don’t see that anymore. They are back in the $ 30 to $ 40 range.

He adds that he believes OCC and blended paper prices are likely to continue to decline over the next six months as weak export demand is likely to continue for some time. “We will probably see [OCC] at $ 100 before the end of the second trimester [of 2022]. Mixed will follow suit and could go back to $ 35 to $ 40.

On the other hand, prices for tissue paper grades, such as sorted office paper (SOP), edged up during the November buying period. SOP generation has been a little below average this year, with commercial shredding activity slowly returning. Representatives of document destruction companies Recycle today spoke with earlier this fall said the SOP generation has improved this year compared to 2020 but has not quite reached pre-pandemic levels. This, they say, pushed up the prices of tissue grades this fall.

Although Southeast Asian paper mills do not require recovered paper, a buyer from a factory in India says the market “started to recover” in October. Its mill mainly consumes mixed paper, waste newsprint (ONP) and SOP. He said demand had been slower in the summer because some businesses and schools were not open and the country still faced challenges with COVID-19 and logistics. But over the past month, he said businesses and schools have reopened, increasing demand for packaging as well as printing and writing paper in India.

“We have constant demand, but not crazy demand,” he says.

The buyer of the Indian plant adds that it has become more difficult for him to obtain ONP, with less of that quality being generated globally as more newspapers go bankrupt. As a result, he says he suspects his factory will turn to alternative sources of supply, such as mixed paper or old magazines.

Transportation also remained difficult in November and costs continued to rise.

“We’ve seen transportation costs go up,” says the buyer of the southern-based plant. “Gas prices are going up, diesel is going up, everything is going up. I see [trucking] open up a bit, but again, it’s always a challenge.

The buyer of the Indian plant adds that securing shipping containers has been a persistent problem for most of this year. He says “difficult” is the only word he would use to describe logistics.

“It’s very hard to get containers, it’s hard to get reservations, and it’s hard to get trucking,” he says. “We can have good reservations, but sometimes you can’t get the truckers because the truckers are in high demand. “

With the challenges of securing trucking, he adds that he suspects national paper mills may start to rely on rail rather than trucking wherever possible. “If you’ve got rails and you can get things on rail, that could be king. This is only my opinion, but I think we will see more dependence on rail in order to be less dependent on trucks.

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