RISI study eyes OCC scarcity

RISI study eyes OCC scarcity

New report from research firm examines OCC supply through 2030.

October 15, 2015
Recycling Today Staff

A new report from Boston-based research firm RISI examines the old corrugated containers (OCC) market for the next 15 years and predicts conditions that “will eventually limit availability of high quality OCC at reasonable prices.”

In a press release announcing the new report, titled “OCC/UKP Market Analysis and Outlook,” RISI comments that “containerboard markets have enjoyed historically low OCC prices since the peak in 2011. However, market dynamics are changing. Market shares of containerboard grades with high recycled fiber content are expected to continue to rise over the next 15 years. Over the same period, virgin fiber content in the world containerboard sector will decline.”

Continues RISI, “In response, containerboard producers in some regions will have to make adjustments to maintain overall quality of their finished products and achieve better profit margins. Producers may respond by increasing mix of unbleached kraft pulp (UKP) or starting up new virgin containerboard machines.”

Hannah Zhao, a senior economist at RISI and the study’s lead author, remarks, “According to our latest forecasts, OCC demand will continue to grow. The global OCC recovery rate will have to climb even higher to support additional capacity in the recycled containerboard segment. OCC availability, therefore, may become a significant issue again in the future—as we saw in 2011.”

Adds Zhao, “The study offers insight into which regions may see new virgin containerboard capacity in the future. It also identifies regions that will compete with others in search for OCC supply.”

The study includes a 15-year forecast and also provides scenario analysis on OCC prices. Other topics covered include:

  • the capacity, production, demand and trade of containerboard in key world regions;
  • OCC consumption, recovery, recovery rates, prices, global trade and quality issues;
  • UKP consumption, trade and production in key world regions;
  • existing market UKP producers, capacity and constraints; and
  • a cost comparison of OCC and UKP, as well as break-even points.

Companies covered within the study include WestRock, Hyogo Pulp Industries, Mondi, Ilim Group, Celulosa Arauco y Constitucion, Canfor Pulp, Carter Holt Harvey, Munksjo, Marisky Pulp & Paper, OAO Pitkyaranta Pulp, Siberwood, Pratt Paper, International Paper, Nine Dragons Paper and Lee & Man.

Information on how to order the study can be found at www.risi.com/occ-ukp.