Attached is your PO for deliveries of recyclables during June 2020.
The overall market for recyclables in June fell severely compared to last month. As stated in our “Market Update for OCC” on June 1st, the domestic OCC price dropped about $40 in early June. Additionally, the lack of demand for domestic OCC forced Pioneer to sell to export markets. Export pricing dropped more, about $45. This significant drop in OCC pricing and demand greatly impacted tip fees this month.
So again, dramatic change is directly related to the economic impact of the COVID-19 virus. Other grades of paper, plastics, and metals were flat or slightly down, the exception being UBC which rose slightly. The overall impact is a large reduction in recyclables this month.
As bad as this all sounds, stepping back and looking at pricing at the macro level, in June, we simply pulled back to the pre-COVID-19 pricings. Over the last two months, we benefited from consumer panic buying, substantially raising the value of OCC. This month, OCC prices returned to March levels.
More paper mills announced temporary closures for lack of orders. And, a large Pacific Northwest paper mill is taking extended maintenance downtime in July. While we cannot predict the future in these trying times, we expect these trends to create more downward pressure on the value of recyclables in July, but we do not expect the change to be as drastic as this month.
As always, 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