Staying Strong

Markets for waste paper and cardboard continue to stay strong into a month that historically sees markets drop off. Most cardboard markets are usually stronger in the early fall preparing for the holiday purchasing of boxes containing products we may purchase toward the end of the year. What does this mean? The overall economy is starting to come out of its slump? More consumer goods buying? Maybe a little of each.

History has shown that this time of the year these board mills are announcing holiday down time, but not this year. What is happening? Let’s go back a few months and maybe find the reason.

When our economy was in a serious slump, not that it isn’t bad today, you and I weren’t too anxious to buy appliances, furniture, televisions which may require cardboard boxes. As a result, the boxes, once used were not finding their second life as scrap cardboard to once again be shipped to these board mills. Most recycler’s inventory is nil, so, with any running time, the board mills need inventory of waste paper. Therefore, they can’t afford downtime and not build an inventory. Make sense?

We are an industry governed for the most part by supply and demand. With exporting to China slowing way down because they now have their fill from paying extravagant prices, domestic levels may become somewhat balanced over the next few months. We will see.