In Like A LION

August came in like a lion with regards to most grades of scrap paper. Fueled in large part by export demands, cardboard/OCC increased by $5.00 to $15.00 per ton in most markets. Many of the domestic paper mills are claiming they are in good shape based on supply and demand; however, several mills in the Southwest are paying premiums to bring in raw materials out of the Midwest.

The gap between exporting of cardboard and domestic consumption is widening. Domestic, Southeast mills are paying approximately $80.00 to $85.00 per ton, while exporting out of that region is approaching $125.00/ton. This same situation was the catalyst for vastly increasing pricing over the last couple of years leading up to the collapse when the exporters pulled back overnight and our general economy was worsening day by day. Let’s think caution this second time around.