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Prices firm in US and Europe

Logistical problems hold back trading as domestic markets remain positive.

As the US approached its three-day Labor Day holiday weekend at the beginning of September, old corrugated container (OCC) prices were close to historic highs. Traders routinely reported mill prices that approached and surpassed the US$ 200 per ton (FOB generator’s dock) threshold while some scattered reports had transactions around US$ 240, indicating massive premiums over what many traders consider the ‘official’ market. Despite logistical nightmares continuing to dog export shipments, domestic demand from containerboard mills remained strong enough to cause the average national OCC price to double what it was a year earlier.

A market survey by The Paper Stock Report indicated an average national mill buying price of US$ 194 per ton in August – up from US$ 153 in July and US$ 93 in August 2020. The strong demand carried into the mixed paper market as well as some mills looked to the grade as a cost-saving substitute for OCC. A year ago, reasonable quality mixed paper was selling around US$ 30 per ton while some suppliers said they were practically giving it away.

In August 2021, mixed paper sales were reported as high as US$ 100. Groundwood grades, including overissue news and sorted clean (deinking quality) news (SCN) also saw prices escalating. ‘It’s hard to find tonnage – everything is accounted for – and throwing more money at it will generate negligible new tonnes in the case of OCC and SCN,’ said one supplier. ‘In the case of mixed paper, some new materials might result as prices rise. All markets are strong, however buyers continue to ‘one up’ each other and the frenzy will continue until mills are in a position that it is totally not worth it.’


August was seen as a stable month for the European exporters. Demand from the Middle and Far East is said to be very weak with Indonesia and India out of the market for brown grades over the past two or three months. On the brighter side, Thailand and Vietnam are countries which are still placing orders. Freights rates are also stable and the struggle to secure containers continues. Domestically, the European market is very strong and demand for all grades is very good. In early September, this resulted in a price increase for the lower grades of EUR 10-20 per tonne and even EUR 25-40 per tonne for the middle and higher grades.

The outlook for the coming months in Europe is that the market will stay ‘hot’. In India, the Indian Agro & Recycled Paper Mills Association reported that a second wave of the pandemic in India and intermittent lockdowns since last March have triggered a doubling of waste paper prices and acute shortage of the feedstock for domestic mills. The association has accused suppliers of taking advantage of the situation to push up prices although analysts see supply chain distribution as a bigger factor.


So far, US mills have been able to pass along the rising price of recovered fibre to their customers. During the first half of the year, US containerboard production was up 5% compared to the first half of 2020, according to the American Forest & Paper Association. Meanwhile, new mill projects based on OCC and mixed paper continue to be announced.

In July, Pratt Paper, the dominant user of mixed paper in the US, announced plans to build a new containerboard mill and corrugating plant in Kentucky. The company recently opened a new mill in Ohio. Other announced containerboard projects, which are in various stages of planning and which may or may not come to fruition, could add as much as five million tonnes of annual production capacity over the next few years.

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