Attached is your PO for deliveries of recyclables during April 2021.
The overall market for recyclables improved significantly this month. This up market is due primarily to an increase in export fiber demand and improved plastics pricing.
Both the export and domestic markets for all fiber grades are up substantially this month. These prices are driven by two predominant reasons: (1) strong export pricing and (2) high demand in the Pacific Northwest OCC market. First, the export fiber market pricing is rising faster than the domestic pricing as the demand for export recycled paper increases. This month, there is a slight increase in export vessels and containers availability, allowing recyclers to take advantage of these higher export prices.
Secondly, the OCC demand in the Pacific Northwest is stronger than ever. With the PCA mill in Wallula running well, the supply of OCC is very tight. The domestic mills need more recycled fiber than is collected by residential and commercial streams. We expect this trend to continue for the near future and the demand for recycled paper to remain robust, which should maintain the upward pressure on pricing.
Another reason for improved recyclables this month is strong pricing for all plastic grades. The recent energy crises in Texas with wind turbines freezing caused a shutdown in polyethylene plants. These plants have been slow restarting and created a shortage of virgin material for plastic containers. The result is a high demand for many recycled plastics. At some point, the polyethylene plants will catch up with demand and recycled plastics pricing will level off. But, we believe the plastics market will remain healthy in the coming months.
As previously mentioned, there was some slight improvement in the logistical backlog for the export market. However, you may have heard about a ship recently getting stuck in the Suez Canal, stopping ocean traffic for several days in that area of the world. While we do not use that specific shipping lane, there will be worldwide backlash from so much equipment being tied up. This will inevitably have a temporary, negative impact on our export market. It may cause the logistical jam at the ports to again worsen before ultimately improving.
As always, rest assured that Pioneer will be working overtime to get the best pricing available in this challenging marketplace. It is our pleasure to work with you to recycle material and to protect our environment. We appreciate you and thank you for your business.
President, Pioneer Recycling Services