Revocation paper price increases strongly in the US

Compared to the January 2020 period, US OCC prices have increased by 196% (FOB), reaching $71/ton in April 2020, the highest price since November 2018. In the period from December 2018 to February 2019, the US OCC price kept an average of 69 USD/ton, then in April 2019 it was only 40 USD/ton, down 42%. Even in some places, due to low supply and high demand, OCC prices were announced to double, increasing by 45 USD/ton, from 15 USD/ton in early 2020 to 60-65 USD/ton in a few transactions (FOB).

Since the beginning of 2020, the price of OCC in the US has begun to show signs of increasing slightly, but at the beginning of April 2020 there was a sudden increase of 47 USD/ton. Specifically, in January 2020 it increased to 24 USD/ton, in 02/2020 it increased to 32 USD/ton, in March 2020 it increased to 44 USD/ton.

The unexpected surge in OCC prices in the US is attributed to supply chain disruptions, shortage of reserves, and a sharp increase in demand. Due to the impact of the Covid-19 pandemic, the amount of OCC generated in the US decreased by up to 50%, specifically, in the Northeast it decreased by more than 60%, in the South in the first few weeks of April it decreased by 5-10%. The collection has also been affected by many recycling material collection and sorting facilities that have closed and stopped operating. Some box packaging factories have had to shut down due to a shortage of raw materials. Compare regions of the United States in the period from January 2020 to April 2020, the average price increase of OCC was 154-200%.

Not only OCC has increased in price, but other recalled paper materials are also seriously scarce, especially selected office paper (SOP) due to school closures, printers in the U.S. are shutting down. In April, SOP prices in the US were traded up to 45-50 USD/ton. In April 2020, the premium option SOP price in the US had an average price of 131 USD/ton (FOB), up 54% compared to 85 USD/ton in January 2020. However, compared to 04/2019, the US SOP price is 17.6% lower.

The consumption of tissue paper per capita in the US is very large, in the US there are also many types of tissue paper used for different purposes and also produced from different types of pulp materials. Anticipating the explosion in demand for home consumer tissue products, some U.S. tissue manufacturers have switched from producing AfH (Away-from-Home) products to home consumer tissue products. This production transformation again faces difficulties in the supply of raw materials. To deal with this situation, tissue factories from recycled materials  are looking for other types of de-retoning paper in addition to SOPs, such as white margins (SWLs), or other high-quality office paper (SBS)...

Currently, the price of SWL in the US has reached 192 USD/ton, 24% lower than the price in April 2019. High demand and low supply have affected the price of recycled paper and pulp replacement products in the US to increase.  Y Tissue paper production from recycled pulp has also planned to convert the production line to use virgin pulp.

Some mills, even large mills, which used to use SWL materials, have switched to HWEC (hard white envelope margins) for better quality and productivity. Mixed paper is also rising in the U.S. Because tissue paper factories use mixed paper as a type of filler to mix with other raw materials, in order to make up for the shortage of raw materials. When the supply of SOP, SWL paper, etc. was limited, factories actively bought mixed paper to make up for it. The price of mixed paper has reached 5-10 USD/ton, this is the highest price since January 2020./.

According to PPI Pulp & Paper Week