Attached is your PO for deliveries of recyclables during February2021.
The overall market for recyclables is down this month. This down market is due primarily to reduced domestic fiber needs and extreme difficulty securing export bookings.
In general, COVID-19 continues to have positive effects on containerboard demand vs negative effects on news grade demand. In February, accounting for the usual significant, post-holiday reduction in demand, both domestic and export markets remain relatively steady. However, domestic mills are full of inbound material and filling their customer demands while reducing their inbound OCC orders.
The export market demand is high, but it is impossible to obtain enough consistent bookings to ship to those markets. Hundreds of vessels continue to anchor offshore awaiting equipment availability. The inability to secure vessels and equipment for export shipments forces all MRFs to sell to lower priced domestic markets. Therefore, the overall effect is a reduction in recycled fiber pricing.
The magazine paper market continued to be under pressure at the end of 2020 and beginning of 2021 as some governments implemented a second round of lockdowns. Although these restrictions did not block activities as completely as the first lockdowns in Spring 2020, many retailers were still forced to either postpone or cancel marketing campaigns and magazines struggled to attract advertising expenditure, which was diverted to television and the internet. This reduced news demand further lowered recyclables pricing this month.
While we expect there to be some continued, short-term downward pressure on pricing, we believe this will reverse over the next several months. Containerboard demand remains steady. And, several new Pacific NW mill startups will be running more consistently by late Spring or early Summer.
As always, rest assured that Pioneer will be working overtime to get the best pricing available in this challenging marketplace. It is our pleasure to work with you to recycle material and to protect our environment. We appreciate you and thank you for your business.