Attached is your PO for deliveries of recyclables during August 2020.
Good news! The overall market for recyclables improved compared to the previous month. This improvement is due to modest pricing increases in all fiber and metal grades. A few plastics grades also increased while others remained flat. In a change of events, domestic OCC demand also increased considerably. This is encouraging information after domestic mills took significant maintenance and market downtime in the previous three months.
This month, OCC demand is high as the containerboard market is strong. This is evident by the domestic mills asking for every ton of OCC produced. Correspondingly, we see the same OCC demand for the entire U.S. and global markets.
Contrary to this, the printing and writing paper markets continue to rapidly decline. These trends are evident in our incoming recycling supply. We see more OCC and less mixed paper as compared to pre-COVID-19. The net-net is that overall supply is down, but it has remained steady for the past three months.
Why do we see these rising trends in containerboard, metals, and some plastics? It is directly related to states and communities reopening from COVID-19 lockdowns. This upward shift in consumer demand has mills requiring more material. While COVID-19 continues to negatively impact the overall economy and provide uncertainty for the future of business in general, we do see indications that the recycling market may continue to improve.
On the long-term horizon, several paper companies have announced plans to build North American containerboard mills. Over the next four years, most experts predict a 5% increase in U.S. containerboard capacity. On the export side, we also see slightly higher paper demands. So, despite the overall financial struggles resulting from COVID-19, we expect the fiber market to experience modest, long-term growth.
In the midst of these challenging times, we will be constantly watching these developments and will always strive to obtain 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.
President, Pioneer Recycling Services