Attached is your PO for deliveries of recyclables during July 2020.
For the second consecutive month, the overall market for recyclables dropped compared to the previous month. This decline is due primarily to both domestic and export OCC pricing. Most other grades were flat or slightly down. Also, demand for domestic OCC decreased considerably. This drop in OCC pricing and demand negatively impacted tip fees this month.
COVID-19 continues to be the principle driving force behind these undesirable effects on the recyclables market. Domestic paper mills have significantly less orders due to consumers and businesses using less paper products. This reduction in demand is requiring many Pacific Northwest mills to take extended maintenance downtime or market downtime in the month of July. Consequently, Pioneer is forced to export sizably more orders of all fiber grades.
In June, we pointed out that, on a macro level, we had simply pulled back to pre-COVID-19 pricing. In July, the continual falling market is now below pre-COVID-19 pricing levels.
Over the next several months, we expect the economic uncertainty to create more downward pressure on the value of recyclables. We anticipate that the decrease in pricing and demand will not be as drastic as in June and July. However, the difficult circumstances we are now experiencing make predicting market changes virtually impossible.
Know this, 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