Attached is your PO for deliveries of recyclables during September 2022.

The value of recyclables plummeted this month. This is the largest, single month drop in recyclables that anyone at Pioneer can remember.

The biggest story in recycling is OCC, with weakened demand causing tremendous domestic and export mill downtimes. Why is OCC demand dwindling? With inflation continuing to rise, there is a huge decline in economic activity. Consumers are forced to spend most, if not all, of their money on essentials like food, gas, and utilities. They are buying little to no discretionary products. Last quarter, Amazon reported the slowest growth rate in 20 years. We saw a large economic downturn in 2008, but many economists state this situation could be worse than the falling economy from the late 1970s.

This economic recession has created a severe decrease in box demand. Domestic OCC prices fell drastically this month. Even worst, domestic demand for OCC is half that of two months ago. Pioneer typically sells 95% – 100% of OCC to domestic mills. This month, less than 50% of OCC sales is to domestic mills. The normal response to reduced domestic demand is to ship to export markets. However, the global economic downturn means export demand is also down. Plus, export prices have deteriorated at double the domestic pace. The domestic and export market situation will lead to many MRFs not being able to sell all their OCC. In addition to OCC, all other grades of recycled paper demand are also down.

We previously wrote about the plastic markets significantly declining this past Spring and Summer. While not as drastic as those times, plastic recyclables continued to decrease this month. A slow construction market and reduced consumer spending were leading causes to the weakening plastic markets.

Metals are also down this month. Aluminum prices continue to slide. The only recyclable grade not to see a significant drop was tin, probably because consumers continue to consume canned foods.

What does the future hold? Although not as severe as this month, we expect to see recyclable prices continue to fall next month. Uncertainty around the economy will probably lead to lower Holiday sales this year. However, there is hope that the Holiday season creates more recyclable demand and slows or stops the horrible market decline of late.

During these unprecedented 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.

Stay Safe!

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