Attached is your PO for deliveries of recyclables during February 2022.
The value of recyclables dropped slightly this month. The market is like a “tale of two cities.” What does that mean? While several commodity prices dropped significantly, these lower prices were partially offset by small increases or flat prices in other commodities.
Let’s talk first about the positive trends in pricing. Domestic OCC is up slightly, due to another strong demand from PNW mills. Despite one mill taking a week of downtime, other mills are running strong and consuming all available supply. Domestic mixed paper pricing is flat this month. However, the domestic market lacks the capacity to consume all mixed paper supply.
Aluminum (UBC) pricing saw the largest price increase among all commodities. This was caused by a severe European energy shortage among metal manufacturers. Without energy to run these plants, North American companies ramped up production to meet needs, creating a high demand for UBC.
Many plastics grades were up slightly or flat. However, HDPE color was down substantially, dragging down the positive benefits from other plastic grades.
Despite the above good news, the export paper market saw the largest price drop in recent months. Where domestic OCC was up less than 5%, export mixed paper decreased 25% – 40% in some markets. This large decrease in pricing negated other positive trends and caused the overall recyclable market to move downward. The major reasons for this large price decrease were:
- Continued logistical backlog at ports and shortage of vessels and containers.
- Higher truck transportation costs to the ports.
- Chinese New Year lowering the overall export paper demand.
Concerning port delays, the Maersk CEO, in a recent interview, stated that there were almost 100 vessels floating off shore of Los Angeles/Long Beach waiting to be unloaded. On average, ships wait three to four weeks to unload. COVID absences and a general shortage of dock workers are a leading cause of these delays. He also stated that he “hoped” to see relief for the global logistics problems in the next six to nine months. We pray that the port backlog clears up before these predictions.
During these challenging times, we will always strive to obtain the best pricing available and to provide you the best possible service. 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.