Attached is your PO for deliveries of recyclables during May 2021.
The overall market for recyclables improved again this month.This upmarket is due primarily to an increase in domestic OCC and plastics pricing.
Two factors led to an increase in domestic OCC pricing. First, domestic demand remained strong. Amazon and other online line purchasing continued to drive container board production in Pacific Northwest mills. Secondly, while the logistical backlog at the ports continued, export bookings did improve slightly. This created more export options for MRFs, and domestic mills increased OCC pricing to keep recyclables in the region.
Despite the slight improvement in the export backlog, the shortage of vessels and containers persists. Therefore, there is no immediate solution in sight that would return us to pre-COVID conditions of a free-flowing export market.
Working against the rising domestic OCC price, export pricing dropped slightly. A few weeks ago, India announced they would import less fiber in the near term. Then, a few days later, they were hit with an unfortunate spike in COVID cases. This resulted in the decision to shut down most businesses in the country, including paper mills. Predominately, India’s imported recycled fiber from North America ships from the East Coast, not the Pacific Northwest. The East Coast fiber which typically goes to India was diverted to other world markets. This excess supply made its way into typical Pacific Northwest markets and lowered the price.
Another reason for improved recyclables this month is strong pricing for several plastic grades. Texas polyethylene plant production has yet to catch up with the plastic resin demand. We expect this catch up to occur within the next two months, and, therefore, the bubble in plastic recyclables should level off and eventually return to typical levels.
As always, Pioneer will work diligently to get the best pricing available in this challenging marketplace. 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.