With demand fully recovered, will global waste paper prices continue to rise?

Over the past six months, the value of waste paper has been rising due to changes in demand in corrugated boxes and other major end markets. Whether this demand continues to grow, and how quickly more old corrugated boxes (OCC) can be provided in the recycling stream as the production of boxes increases, will determine how long prices will continue to rise.

In a panel discussion hosted by the Institute of Scrap Recycling Industries (ISRI), a trade association, and Davis Index, a materials pricing index that reports the value of recycled commodities, the factors guiding the current North American recovered paper market were discussed. "We have experienced a typical industry roller coaster ride," said Johnny Gold, Davis Index waste paper market expert. "But since July 2023, we have seen an upward trend in the low-grade market."

According to the data, the average U.S. OCC price fell sharply at the end of 2022, plummeting from $131 per ton in July 2022 to $29 per ton at the end of the year. Mixed paper prices also fell, from $70 per ton in June 2022 to negative $1 per ton in October 2022.

But in recent months, the trend has shifted, with both OCC and mixed paper prices rising - OCC rose steadily in the second half of 2023 and continued to rise at the beginning of this year, reaching $87 per ton in January, according to data. Mixed paper prices also rose in 2023, reaching $48 per ton in January.

Experts say most signs point to continued strength in pricing. In particular, end-market demand is improving and is expected to continue this trend. "For the key market segments of consumer recycled paper grades, we have good long-term growth market foundations, which is really encouraging and worth looking forward to," said José Gonzalez, director of AFRY Management Consulting, which provides market research.