Attached is your PO for deliveries of ResMix for the month of July 2019.
The market for recyclables has, overall, moved very little in the past month. Both OCC and MIX pricing remain at 25 year lows. Plastic pricing is soft due to increasing pressure from virgin plastic pellets which are benefiting from much lower pricing for natural gas and oil. The metal grades are soft as well. That said, there are some encouraging trends in the marketplace to report as follows.
First, despite the virtual withdrawal of Indonesia for MIX purchases due to the country implementing draconian inspections procedures, movement for MIX elsewhere remains strong. We have the orders we need for the entire month of July even though Indonesia has drastically reduced their purchases this month. We believe this strength in movement is related to the recent opening of a Lee & Mann mill in Myanmar and Nine Dragons buying MIX to resort it from countries neighboring China as a workaround for China’s quality requirements. In short, two new projects which use MIX have come online and are impacting the marketplace. This is good news especially given that there are many more announced projects in the pipeline.
Second, while the price of OCC has yet to move much, our phone has been ringing with OCC buyers calling us rather than the norm of most of this year where we have been calling them.
These two developments have made us cautiously optimistic that the paper market has reached a temporary bottom and may turn positive for at least one to two months before the normal seasonal decline in demand associated with the end of the harvest and Christmas packaging season takes hold.
Lastly, let us reiterate that we remain very optimistic for the mid to long term as we count at least 16 announced mill expansion projects in the construction pipeline.
As always, rest assured that Pioneer will be working overtime to get the best pricing available in the marketplace each and every day. We appreciate your business.
President, Pioneer Recycling Services
Shameless Plug- For the first time, Dave has been invited to speak at the national level at the Resource Recycling Conference in New Orleans Aug 26-28. If you will be attending the conference, be sure to attend Dave’s presentation.