Market pricing for cardboard and other paper recovered materials continue to weaken. It is unfortunate as many suppliers and companies rely on the pricing of various commodities to help pay for collection and equipment. We would hope that the current pricing levels are near the bottom, hindsight will tell.
Even a modest increase in commodity prices will spell relief for collectors and the supply chain as the cost to transport and process the materials will off set by the value of the material.
Have you been receiving feedback on the quality of the materials collected at your location? Well the reason is, that the end mills are focusing on buying clean and ready to process recycling materials. Quality of materials continues to be a major focus for the recycling industry and consumes a lot of time, resources and capital to ensure that the products shipped to end markets are clean and ready for processing into new packaging, boxes or other consumables. The old saying “when in doubt, keep it out” applies.
The China ban on inbound recyclables is on schedule for 2020, and it appears that early 2020 is a definitive end date for importation of recovered materials such as cardboard. This means that there is more material in the domestic and other markets, and the price declines as these buyers don’t need to pay any more for recovered materials. Good news for producers of packaging – they don’t have to pay much for their raw material, but bad news for the supply chain such as grocery stores, retailers and other parts of the supply chain.
Until the end of May, prices for high grades of material such as office paper and newsprint were holding fairly well or only in gradual decline. It would appear that these markets are now changing as well, the most recent drop-in high-grade office paper will also mean higher collection and processing costs for a variety of customers including office buildings or even small offices generating office paper grades.
Truly, it would be much nicer to write about a recovery in pricing. Let’s hope that that we are near the bottom and that better prices for all commodities will prevail in the medium term.