Attached is your PO for deliveries of recyclables during January2021.
The overall market for recyclables is flat this month. This sideways market is due to a combination of increased demand with greater increased supply.
Demand created upward pressure on prices this month. Domestic packaging mills are running at full capacity as consumers continue to create box demand with online shopping. In addition to normal domestic mill demand, Packaging Corporation of America (PCA) began consuming recyclables for their new containerboard mill startup in Wallula, WA. The export demand for fiber remains strong. However, the same equipment shortages discussed last month worsened this month, making export shipping extremely difficult.
In a typical market, this increase in demand would cause prices to increase. But, the supply situation explains why prices did not improve. The inbound supply at every MRF grew significantly beyond the normal post-holiday surge. Total inbound recyclables are up 10% – 15% more when compared to January a year ago. In the Pacific NW, the inbound supply surpassed the higher market demand—paper mills and MRFs are full of material. This supply-demand imbalance caused fiber pricing to remain flat in most cases and to drop slightly in some export grades.
Pricing for a few plastics and metal grades improved. This improvement help counter the overall downward pressure in the fiber market.
The long-term shifts in consumer shopping habits, caused by COVID-19, will probably offset the typical, seasonal drop-off we experience in February. In general, we expect upward pressure on pricing to continue in coming months due to continued mill demands and decreases in supply.
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.