Asia — China in particular — continues to steal the scrap commodity pricing “show.” As we focus on paper markets this issue, China’s role is significant once again.
Overall, paper-stock markets are positioned for sound performances. Several factors account for this. First, the economy continues to show signs of strength. Second, North American paper supplies are critical to the Chinese paper industry. Third, domestic markets are solid.
Mixed paper, however, is the real showstopper of late. Historically, mixed paper commanded low prices due to its erratic composition. Today, however, mills actually seek mixed paper — soft or hard — as a substitute grade for OCC which is near maximum recoverable levels. Mixed paper, in contrast, is far from maximum recovery levels and is actually in short supply, a condition some attribute to China’s buying power.
Outside of OCC and mixed paper, ONP is holding its own, despite decline in demand and loss in quality due to the growth of single-stream recycling strategies.
Aside from foreign competition, other influences on the North American paper market include competition for forest products from plastics and electronic media. Paper packaging is “winning” in some categories like carryout, prepared foods, shipping sacks and juice/fruit juice drinks but is likely to lose market share in other categories such as egg and milk cartons and retail bags/sacks.
Still, scrap paper and paper box materials comprise up to 37 percent of the fibre used in paper products made in North America today, with recycled paperboard growing in popularity among both consumers and manufacturers.
Contact Damian Bassett at 416-594-3457, ext 3457 or visit www.csr.org (CSR Sheet located under “Publications”)