Attached is your PO for deliveries of recyclables during October 2022.
The value of recyclables plummeted again this month. This is the largest, two-month drop that we have ever seen. All grades of paper nosedived and drove down ResMix value.
Last month, the biggest story in recycling was OCC. This month, OCC again cratered with weakened demand causing more domestic and export mill downtimes. Additionally, all other paper grades also plunged downward, just like OCC. The State of Washington and State of Oregon prohibit landfilling recyclables. Throughout much of the U.S., however, many MRFs have begun sending recycled paper to landfills. There simply is not enough demand for all the collected paper. Several Washington and Oregon MRFs were forced to store unsold paper in off-site warehouses. When MRFs can find movement, some paper grades dropped below zero, forcing them to pay customers to take material.
Again, this month, more than 50% of OCC sales goes to export markets. Almost 100% of other paper grades are also going to export markets. Increasing transportation costs have further degraded the value of recyclables. Shipping lines recently increased port and vessel costs. And, recently rising diesel prices are increasing trucking costs to ports. Until domestic demand returns, these transportation costs will continue to hurt recyclable markets.
The plastics market continued to slip. MRFs are having to pay to get rid of some grades of plastic. The U.S. demand PET has dwindled to nothing. As a result, MRFs are forced to export this plastic grade at significantly higher costs.
Metals pricing continue to slide. The aluminum market continues to point to well-supplied consumers. In addition to reducing prices, most companies who process used beverage containers (UBC) have cutback consumption.
Looking forward, retail companies are predicting low consumer spending this Holiday season. The projections are not helping the declining box board demand. Therefore, we believe the paper market will continue to soften. We anticipate that the value of recycled paper will not fall as rapidly over the next couple of months. But, it will decrease some and probably bottom out soon. There is little expectation that prices will rise again until late Winter or Spring of next year.
During these unpredictable 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.