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OCC pricing takes major dive

Market struggles with surplus supply as demand seen during the COVID-19 pandemic e-commerce boom has cooled substantially.Plummeting prices for old corrugated containers (OCC) continue to reflect a market struggling with surplus supply as demand seen during the COVID-19 pandemic e-commerce boom has cooled substantially.OCC prices in many regions fell by $40 per ton, according to Fastmarkets RISI’s Pulp & Paper Week “Price Watch” dated Sept. 7, with the Southeast seeing a $45-per-taon drop. The Los Angeles and San Francisco regions saw the least amount of damage but still did not escape unscathed, both facing a $15-per-ton decrease in prices.

According to RISI pricing data, the average U.S. OCC price per ton stands at $77, down 29 percent from August and approximately 53 percent from a year ago, when the average price was $98 per ton.

Mixed paper also has faced a notable pricing decline, with the current U.S. average at $18 per ton. That’s down 59 percent from August and nearly 82 percent (81.6 percent) from a year ago, when the average price was $98 per ton.

The decreased demand was reflected in a recent announcement from FedEx when it issued an earnings warning predicated on the softening global volume of packages being shipped to customers, with New York-based investment banking company Jefferies Group noting a “massive inventory glut” in cardboard.

The bank also reports a sharp decline in orders for cardboard packaging and anticipates manufacturers such as International Paper, Memphis, Tennessee; Packaging Corp. of America, Lake Forest, Illinois; and Westrock, Atlanta, will slash prices in the fourth quarter of this year.

Because of the new containerboard capacity expected to come online within the next year, Jefferies says it expects the situation to continue to get worse in 2023. Projects like Domtar’s Kingsport, Tennessee, conversion of an uncoated freesheet printing and writing paper machine to produce 100-percent-recycled-content containerboard are reported to be on track, with the Fort Mill, South Carolina-based manufacturer telling the Kingsport Times News the project “is almost complete.”

Troy Wilson, general manager of the Kingsport mill, told the Kingsport Times News, “All our major equipment is in place, and we expect to resume operations at the plant during the fourth quarter.”

Pratt Industries, based in Atlanta, also has a $500 million paper mill and box factory under construction in Henderson, Kentucky, it says is on schedule. When the company announced the project, it said it expected construction of the paper mill to be complete in 2023.

A report in mid-September from WFIE 14 News in Evansville, Indiana, says the company still is in the process of securing the land to build its 700,000-square-foot corrugator plant to produce corrugated sheet and boxes, which it also expects to be complete by next year.

Additionally, Empire Recycled Fiber is in the process of retrofitting a facility in Dayton, Ohio, to produce 350,000 tons per year of recycled containerboard and says it expects it to be operational in 2024.

While Cascades’ Bear Island conversion in Ashland, Virginia, threatened to run into delays related to high costs and labor and material availability constraints, the project still is expected to come online by early next year, adding to the influx of containerboard capacity on the horizon.

Sorted office paper (SOP) premiums, however, for the most part have stayed put in RISI’s most recent update after increasing steadily over the past few months to the point where several recyclers Recycling Today contacted reported the highest premiums they’d seen in their careers.

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Govt brings import of paper under compulsory registration from Oct 1
Move addresses dumping concerns of domestic paper industry and also checks re-routing of goods through other countries in lieu of trade agreements, says govt
In a bid to protect the domestic paper industry, the commerce and industry ministry on Thursday said it has decided to make registration compulsory for importing major paper products such as newsprint, handmade paper, envelopes, among others.
All imports arriving on or after October 1 will be governed by the Paper Import Monitoring policy that aims to put an end to dumping of such products and address the issue of re-routing of goods through other countries in lieu of trade agreements.
“The import policy of major paper products has been amended from ‘Free’ to ‘Free subject to compulsory registration under Paper Import Monitoring System,” an official statement said.
This order will be applicable on a range of paper products such as newsprint, handmade paper, wallpaper base, duplicating paper, coated paper, uncoated paper, litho and offset paper, tissue paper, parchment paper, carbon paper, wall paper, envelops, toilet paper, cartons, account books, labels, bobbins, among others.
Paper products like currency paper, bank bond and cheque paper, security printing paper, among others, have been excluded from the monitoring system.
The development comes in the backdrop of the domestic paper industry raising issues of dumping of paper products in the India market by under-invoicing, entry of prohibited goods by mis-declaration, re-routing goods through other countries in lieu of trade agreements.
“A large proportion of paper products are imported under “Others” category tariff lines. The move will also go a long way in promoting Make In India and Atmanirbhar in this category,” the statement said.
The government has already created an interface for the implementation of the Paper Import Monitoring System (PIMS). Online facility of registration will be available from 15 July. In the past, the government had implemented a similar system for steel and coal.
“Any importer will be able to obtain an automatic registration number online by paying a registration fee of Rs. 500. The importer can apply for registration not earlier than 75th day and not later than 5th day before the expected date of arrival of import consignment. The automatic registration Number thus granted shall remain valid for a period of 75 days. Multiple Bill of Entries shall be allowed in the same registration number within the validity period of registration for the permitted quantity,” the ministry said.
Source business Standard
India's paper consumption to touch 30 million tonnes by FY27: IPMA
Paper consumption is likely to witness 6-7% annual growth and will reach 30 million tonnes by FY 2026-27, largely driven by emphasis on education and literacy coupled with growth in organised retail
Paper consumption in India is likely to witness 6 to 7 per cent annual growth and will reach 30 million tonnes by FY 2026-27, largely driven by emphasis on education and literacy coupled with growth in organised retail, according to industry body IPMA.
The paper Industry holds immense potential for growth in India as the per capita consumption globally is one of the lowest, the Indian Paper Manufacturers Association (IPMA) said in a statement.
"Around 15 per cent of the world population stays in India but consumes only 5 per cent of the total paper produced in the world," the statement said.
The emphasis on education and literacy coupled with growth in organised retail and demand for better quality paper are the major drivers of growth.
Moreover, there has been continued demand for quality packaging of FMCG products, pharmaceuticals, textiles, organised retail, booming e-commerce, and other segments, it said.
According to industry body IPMA, paper consumption in India is projected to grow by 6-7 per cent per annum in the next five years so as to reach 30 million tonnes by the year FY27, making it the fastest growing paper market in the world.
"Paper Industry in the country has undergone a transformation of sorts in the last few years. The industry has gone up the sustainability curve and has become far more technologically advanced.
"In the last five to seven years, an amount of over Rs 25,000 crore has been invested in new efficient capacities and induction of clean and green technologies," IPMA President A S Mehta.
The estimated turnover of the industry is Rs 70,000 crore with domestic market size of Rs 80,000 crore.
Indian Agro & Recycled Paper Mills Association (IARPMA) President Pramod Agarwal said during COVID, while writing and printing paper witnessed demand contraction, the paper packaging industry fared well as the pharma sector, FMCG and growth in e-commerce played a major role in driving growth in the paper sector.
"As the economic activity opens up in the post-pandemic era, the growth momentum is likely to get further acceleration," he said

IARPMA is organising Paperex 2022 - an international conference and exhibition on the paper sector in the world to be held from May 10-13 at Greater Noida.
Source :- IPMA
DS Smith Paper announces €140/t increase for all of its recycled corrugated case material grades
DS Smith Paper announced that it would increase prices for all of  its recycled corrugated case materials by €140 per tonne across Europe and by £120 per tonne in the UK, due to "a significant increase" in its input costs. The company said that the increase was for all orders confirmed from the day of the announcement, which is 7 September 2022.
DS Smith Paper's call for higher prices follows similar announcments recently made by at least two other producers of recycled corrugated case material.
The recent surge in energy costs has prompted many paper producers in all segments of the industry to ask for higher prices at short notice.
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