Attached is your PO for deliveries of recyclables during July2023.
The value of recyclables issignificantly down this month. Every grade except OCC fell.
In the Pacific Northwest (PNW), demand from domestic paper mills is flat. Domestic mills are consuming much of the OCC production and pricing did not change. But, with PCA indefinitely shut down, MRFs are having to export some OCC. Export demand for OCC has increased, but there is not enough supply in the PNW to fill the export demand as domestic mills are running consistently.
Mixed paper is a different story. In the PNW, NORPAC is one of the few mills consuming mixed paper. The domestic price for mixed paper decreased a bit. But, export pricing reduced 25% to 33% from last month. This drastic change affected the overall value of recyclables. Many Southeast Asian countries are experience large demand drops, driving down prices.
Plastics pricing plummeted this month, more than anyone can remember in recent years. These market changes had the largest impact on overall recyclables. For several months, we have said that HDPE natural value is relatively flat, with other grades of plastics decreasing slightly. This month, HDPE natural dropped 40% in the beginning of July. Then again, only days into July, natural prices dropped another 10%. Today, the price is half of last month. Additionally, we expect prices to continue to drop every week in July. We have never seen the value of this grade decline so fast. Nobody has a good reason for such rapidly changing prices. Producers have shifted to cheaper virgin resin, a by-product of the natural gas industry. But, that shift is not enough to account for this drastic change.
All other plastic grades also lost value, but PET saw the biggest drop. Today, the domestic PET market is almost nonexistent. Producers have an oversupply of raw material, and a lack of demand has several producers taking downtime. Those producers who are running have also shifted to less expensive virgin material. Many MRFs are having difficulty moving this grade and are stuck with stockpiles of PET bales. In fact, the value of domestic PET is negative, meaning MRFs pay customers to pick up PET loads.
Overall, metals dropped again.Consumption of aluminum cans remains suppressed compared to prior Summer months.Consumer purchases of foods from tin cans are also down.So, we saw another significant drop in UBC value with tin remaining flat.
These are trying economic times, creating uncertainty in the recyclables market. We are staying on top of trends to deliver you the highest possible price and to provide you with the best 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.
Stay Safe! Enjoy this Holiday season.
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