US OCC ends six-month pricing plunge as mills stock up for winter weather

After a six-month pricing plunge, prices for US old corrugated containers (OCC) mostly held firm at the FOB seller’s dock in January with steady demand from mills that are preparing for potential winter weather slowdowns that could affect material movement, and the seasonal short-supplied month of February.

For export orders, buyers, especially in Southeast Asia, and also in India, bolstered their purchases and prices for US OCC, and prices increased by $10/ton FAS for No. 11 OCC and No. 12 double-sorted old corrugated containers in January, according to Fastmarkets’ PPI Pulp & Paper Week Jan. 7 pricing survey and market report.

For domestic OCC orders this month, US OCC prices remained unchanged from the month prior in the Northeast, Midwest, and Southeast regions at $75-80/ton, and at $45-50/ton in the Pacific Northwest. Out of California, OCC prices increased by $5/ton to $50-55/ton in Los Angeles, and to $30-35/ton in San Francisco.

Prices decreased by $10/ton in the Southwest region, to $75-80/ton at the FOB seller’s dock, where buyers and sellers said this week a growth in generation from grocery and retail, as well as collections after the holidays, met a pushback from mills, dropping prices in January. Still soft demand from mills in Mexico also left tons without homes in the Southwest region.

Mill contacts told P&PW this week while they “are carrying very healthy inventories,” as one major mill group said, they still sought more bulk grades in January to prepare for potential upcoming seasonal slowdowns.

February, for one, is historically the lowest generation month of the year, coming off the high generation months of December and January, when Americans shop for the yearend holidays, and add more supplies to the recovered fiber stream. One large containerboard producer said, “it’s important to play the strategy for January,” referring to mills stocking up on raw materials to ensure inventories are higher than typical at the start of February.

Winter weather conditions, including snowstorms that could cause troubles for transportation, as well as frigid temperatures, also are top of mind, contacts said.

“We’ll be looking throughout the month of January to get inventories toward the higher end,” a mill contact in the South said on Jan. 6.

DSOCC up $10. Strong demand for DSOCC in January from Southeast Asia, including Indonesia, Malaysia, Thailand, and Vietnam, increased prices in January by $10/ton FAS to $147-150/ton FAS out of the New York/New Jersey and Los Angeles/Long Beach ports. For No. 11 OCC, prices increased to $137-140/ton out of the New York/New Jersey and Los Angeles/Long Beach ports.

Higher prices this month for DSOCC out of the Los Angeles/Long Beach ports ended a six-month reduction in prices as buyers backed off of purchases.

Export buyers returned for a host of reasons. For one, demand from Southeast Asia improved as China’s finished product demand rebounded some, contacts said this week, and as prices for recovered paper collected in China have “increased since the beginning of December for Chinese New Year packaging production,” as one mill contact said.

Mills in Indonesia also received their new 2025 import licenses, strengthening that country’s demand for US OCC and mixed paper in January.

Finally, another potential port strike off the US East Coast could occur again when negotiations start on Jan. 15 over labor contracts related to automation use at the ports.

The January discussions follow a three-day port strike off the US East and Gulf Coasts the first week of October that seemingly stopped shipments of US recovered paper out of the major New York/New Jersey ports.

Like in December, contacts said this week that some buyers placed additional orders so as to attempt to avoid the strike, as well as any possible tariffs on imports from China that incoming President Donald Trump threatened to implement once he takes office.

“Demands have improved compared to December,” a seller said. “Many Asian mills … are replenishing (scrap) paper stock because sales of finished paper has improved as Chinese exports increases due to pre-emptive US buying to circumvent Trump import tariff.”

High grades mostly hold. After several months of depressed pricing, high deinking grades prices mostly held firm in January, save for $5/ton rises in the Midwest and Southeast regions where improved demand faced tighter supplies, according to contacts. Premiums increased in some trades by $5-10/ton for January orders, contacts said.

The $5/ton boosts put sorted office paper (SOP) in the Midwest and Southeast regions at $110-120/ton at the FOB seller’s dock. Prices for SOP held unchanged in the Northeast region at $105-115/ton, in the Southwest at $115-125/ton, in the Los Angeles/San Francisco regions at $145-155/ton, and in the Pacific Northwest at $90-95/ton.

“Our production is increasing and so are our needs, and our suppliers are very happy to be able to supply more loads,” a mill contact said of SOP.

Pulp substitutes prices, too, held firm month-over-month in January. Some buyers said they purchased more pulp subs in January than in recent months, and the availability of hard white envelope cuttings, for one, “has been extremely good” as one buyer said.

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