Attached is your PO for deliveries of recyclables during March2021.
The overall market for recyclables is up slightly this month. This upmarket is due primarily to an increase in export fiber demand and improved plastics pricing.
The domestic market for all fiber grades is flat this month. Typical to this time of the year, some domestic paper mills took scheduled maintenance downtime. Also, some of the new startup mills have yet to ramp up to full production. The demand is high for those mills which are running. But, the two mentioned factors offset the otherwise high demand, leading to no movement in price.
On the other hand, export fiber demand is up. With this increased demand, export mills are paying more for recycled fiber. Across the board, to cover the cost for recycled fiber, export mills announced price increases for their boxes.
Since last month, fewer ships are anchored offshore waiting to be unloaded. While this did not immediately fix the equipment shortage for exported recycled materials, it indicates that delivering recyclables to these high-demand markets may improve in coming months. Predicting the future is challenging. But if the export backlog clears up, we would expect modest domestic price increases to compete with the export markets. This would be good news for our recycling industry.
Plastics pricing improved slightly this month. You probably heard of the energy crisis in Texas when frozen windmills knocked out 25% of the electricity supply for that state. In response, Texas held onto its natural gas supply for energy uses. As raw material of plastics production is a linked to natural gas production, this created a high demand for recycled plastics. This increase in demand improved plastics pricing this month.
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.