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Even-keeled.

While recovered fiber isn't fetching the high prices it was in early 2007, prices remain above average across most grades. As spring shifts into summer, sources report stable, steady markets with little movement either up or down in price and no large swings in supply or demand.

Export buying from Asia has been quiet for the last month or so, with China nibbling at the supply instead of engaging in more aggressive purchasing. This has led some sources to speculate inventories in Asia will soon be running low, which will lead to more aggressive export buying.

Sources report steady, if slightly slow-moving, markets for all grades, from bulk grades like old corrugated containers (OCC) to high grades like sorted office paper (SOP). While there is hardly screaming demand for recovered fiber at the moment, sources say the market has settled into a fairly comfortable rhythm of supply and demand where there is little trouble moving material or filling orders.

The only sign of trouble, according to a Midwestern recycler, is on the old newspaper (ONP) front. The construction market, particularly new residential housing starts, has been weak throughout 2007. The most recent construction spending report, released by the U.S. Commerce Department May 31, showed total construction spending posting a meager gain of 0.1 percent in April, but falling 2.5 percent for the first four months of the year compared to the same period in 2006. The residential construction component of that number fell 0.9 percent for the month and 15 percent year-to-date. The dismal housing market is bad news for the insulation market, which is a major buyer of ONP.

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Historically, the end of June sees some unrest in the market as mills try to build up their inventories in anticipation of the July Fourth holiday. However, this year, with the holiday falling mid-week, sources do not expect much change in usual buying patterns.

Looking forward, sources expect a pretty typical summer for the recovered paper market. Traditionally, business slows down in general during summer months, and the same goes for the recovered fiber industry. "Business in general in the summer tends to be a little bit slower, and, generally, the tonnage available is a little less," says one West Coast recycler. Generation tends to fall across the board, particularly office pack, as more people take vacation during the summer. Retail is slower, which translates into fewer ads and thinner newspapers, thus less demand for printer grades. OCC generation also tends to dip in the summertime, sources say. However, the relaxed pace tends to shift into a higher gear come early August, which brings back more active retail business sends children back to school and sees the industry already beginning to gear up for the holiday season.

(Additional news about paper recycling markets, including breaking news and pricing, is available online at www. RecyclingToday.com.)
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Title Annotation:PAPER
Publication:Recycling Today
Date:Jul 1, 2007
Words:481
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