Attached is your PO for deliveries of recyclables during August 2021.
Again, the overall market for recyclables improved considerably this month. The high demand for domestic paper and strong plastics market continue to improve commodity pricing.
Paper demand in the Pacific Northwest remains strong. We are also seeing large demand and pricing hikes in Northeast, Southeast, Midwest, and Southwest U.S. Why do I mention this? Short paper supply in other North American regions causes those mills to reach farther and pay more for recycled paper. For example, mills in Chicago and Phoenix are extending their markets and buying recyclables from Idaho, Colorado, and Northern California. In turn, that causes an overall shortage of paper throughout the remainder of the U.S. So, despite the Pacific Northwest paper pricing only rising moderately, the supply of paper became tighter. We expect robust demand in the market through the Holiday season, which should keep paper prices elevated.
From January through July of this year, plastics pricing soared because of the shortages created from the Texas shutdown. But, in this month, plastics pricing only improved slightly. This indicates that the industry may have recovered from the Texas shutdown and that plastics pricing may have reached its peak. Still, we see strong demand for plastics and do not expect pricing to drop in the immediate future.
In the export market, the port backlog lingers. Most global logistics experts expect the shortage of vessels and containers to remain through March 2022. So, while export paper demand is healthy, shipping to those markets is difficult. Additionally, a shortage of truck drivers makes getting containers to the port more challenging and more expensive.
In summary, all indications are that the upward pressure on the recycling market will continue for the remainder of 2021. Pioneer remains diligent in getting the best pricing available. 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.