Attached is your PO for deliveries of recyclables during March 2022.
The value of recyclables improved this month. This upward trend is driven by flat to increased pricing for all commodities.
In general, we expect the market to improve during this time of the year with inbound supply decreasing and demand for recyclables remaining strong. This point is holding true this year. We expect a general upward trend in market pricing despite several negative influences we’ll mention later. Specifically, there are several positive trends in today’s market.
- Recycled paper demand continues to outpace supply.Year-over-year (YOY) sales for all domestic paper mills are significantly higher.
- PNW mills are running well with the greater demand for their products.
- Malaysia increased their demand for recycled paper, pushing up export pricing. Malaysia does require onshore (in the U.S.) inspections to ship, which adds to the cost of selling to that destination.
- Following several months of falling recycled plastics pricing, recycled materials are now more competitive compared to virgin material. The continued demand for plastic packaging led producers to raise all recycled plastics commodities.
Contrary to these positive trends, we still have negative pressure on pricing from the following:
- Global logistical backlog – all indications are this logistical issue will persist the remainder of 2022.
- National inflation raising prices for all services.
- Rapidly rising oil prices cause trucking costs to soar.
- Port worker productivity is down slightly as West Coast longshoreman begin negotiations for a new contract effective JUL 1, 2022.
Related to paper, domestic mills are increasing their prices for container board and packaging. While the general inflationary pressure consumes much of the domestic mill profits, raising their prices allowed them to pay slightly more for recycled supply from MRFs. Were it not for soaring trucking costs, we would have seen even higher paper price increases. For plastics, general demand is up with new wash lines and pellet produces looking to expand operations. Like last month, aluminum cans (UBC) are in high demand with continued European energy shortages creating pressure for North American companies to produce more aluminum.
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.