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Paper Recycling Conference – IndiaFebruary 2017
At What Price – Global Recovered Paper Market Price Trends
Bill Moore
Moore & AssociatesAtlanta, GA
www.MARecycle.com
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Moore & Associates –Paper Recycling Market Consultants
• Recovered Paper Market Experts
• Based in the US, Global Practice
• Market Research/Analysis
• Recycling Business Strategy
• Pricing Analysis
• Recovered Paper Purchasing/Selling Optimization Assistance
• Innovative Supply Sourcing and Development
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Long Term Average Annual US OCC Price
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OCC - Export Prices from the US, UK & Germany
Notes: USD per metric ton; UK Pound to USD – 1.25; German Euro to USD – 1.04
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US Sourced OCC Export CFR/Delivered Prices
Notes: USD per metric ton; UK Pound to USD – 1.25
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OCC FAS Prices – New York Export Courtesy of RISI’s - Weekly US Recovered Paper Export Price Index - US $/ton
May-17, 2013$143
Aug-9, 2013$175
Dec-6, 2013$145
Feb-21, 2014 $165
July-18, 2014$149
Sep-12, 2014$133
Oct-24, 2014$145
Feb-13, 2015$119
Jun-19, 2015$149
July-24, 2015$142
Jan-22, 2016,$126
May-20, 2016, $131
Aug-5, 2016,$167
Jan-20, 2017, $193
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1530
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1629
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625
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OCC #11 FAS NY port RISI Index export price , US $/st
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Mixed Paper Prices – US versus Europe
• Mixed Paper prices in Europe are higher than in the US – typically 80+% of OCC
• Caused by stronger demand for Mixed Paper in Europe, used more in containerboard than in the US
• US domestic use of Mixed Paper in the US is pretty limited, it is mostly an export grade (70%) – caused by the low quality of the grade, the lack of modernizing stock prep systems at US board mills, and good OCC & virgin kraftfiber availability
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Mixed Paper – Export Prices from the US and UK
Notes: USD per metric ton; UK Pound to USD – 1.25
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Long Term US Average Mixed Paper Price as a Percentage of OCC Price
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Shorter Term US Average Mixed Paper Price as a Percentage of OCC Price
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Mixed Paper Market Pricing Trends
• At the bottom of the price cycle Mixed Paper will be very soft. One of the only recovered paper grades that has an abundant supply. But when OCC prices go up, Mixed Paper prices will strengthen quite a bit.
• Expect very volatile pricing.
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ONP - Export Prices from the US and UK
Notes: USD per metric ton; UK Pound to USD – 1.25; LetsRecycle ONP is “News and Pams”
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Longer Term US Average Domestic FOB ONP Price
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Longer Term US Average Mixed Paper Price as a Percentage of ONP Price
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Shorter Term US Average Mixed Paper Price as a Percentage of ONP Price
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ONP Market Pricing Trends
• Supply of ONP will continue to fall globally – a classic supply short grade
• Demand from the newsprint sector will fall commensurate with the supply of ONP
• ONP demand from recycled fiber based cartonboard/boxboard will continue to increase globally
• High quality ONP for deinking and other special uses is a premium grade
• Supply short nature of ONP will keep bottom of the cycle prices higher than historical performance
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SOP - Export Prices from the US and UK
Notes: USD per metric ton; UK Pound to USD – 1.25; LetsRecycle SOP is “Multigrade”
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How SOP/Woodfree Deinking High Grades are Effected by World Tissue Demand versus Printing/Writing Production
((Million Tonnes) – Note, not all tissue is based on recycled fiber
P&W Consumption Tissue Production
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Woodfree Deinking High Grades – Future Demand, Supply, and Pricing
• Recycle fiber growth as a percentage of furnish for the global tissue industry has peaked because:– The downturn in the production and use of printing/writing
papers – less available Deinking High Grades (DHG)– Widely available bleached pulps from downturn in production of
printing/writing papers and still more pulp capacity additions will make virgin fiber more competitive
– Lower quality SOP (lower yield) and higher processing costs (both for capital equipment and chemicals)
• Less DHG needed going forward, but pricing should strengthen, but have distinct caps (limited by virgin pulp prices).
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Recovered Paper Quality and Its Impact on Pricing
• In the developed regions of the world, MRF/paperstock/ collection operators are having to add cost to make higher quality products from lower quality input streams. Margins in these businesses are slim, but some of the extra costs will be borne by this sector
• The mill industry will wind up picking up part of the cost, but not a lot as the global paper industry finances are not real healthy in most grades (tissue and packaging grades are better)
• Pushing more costs back to the generators. is the best solution – it is happening. Also generators will be incentivized to supply higher quality input materials
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Summary of RCP Price Trends Going Forward
• In general trend line pricing for all grades are up going forward, although the market is starting to get to a top
• All RCP grades with the exception Mixed Paper are for the most part supply short in the developed regions of the world
• OCC is expected to have the strongest pricing• SOP will be strong: top end price caps and high bottom
of cycle pricing• ONP will have high bottom of the cycle pricing, caused
by lack of supply• Expect Mixed Paper prices to fall out quite a bit when
the markets soften, but rise rapidly when OCC prices strengthen
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