Market struggles with surplus supply as demand seen during the COVID-19 pandemic e-commerce boom has cooled substantially.

Plummeting prices for old corrugated containers (OCC) continue to reflect a market struggling with surplus supply as demand seen during the COVID-19 pandemic e-commerce boom has cooled substantially.

OCC prices in many regions fell by $40 per ton, according to Fastmarkets RISI’s Pulp & Paper Week “Price Watch” dated Sept. 7, with the Southeast seeing a $45-per-ton drop. The Los Angeles and San Francisco regions saw the least amount of damage but still did not escape unscathed, both facing a $15-per-ton decrease in prices.

According to RISI pricing data, the average U.S. OCC price per ton stands at $77, down 29 percent from August and approximately 53 percent from a year ago, when the average price was $98 per ton.

Mixed paper also has faced a notable pricing decline, with the current U.S. average at $18 per ton. That’s down 59 percent from August and nearly 82 percent (81.6 percent) from a year ago, when the average price was $98 per ton.

The decreased demand was reflected in a recent announcement from FedEx when it issued an earnings warning predicated on the softening global volume of packages being shipped to customers, with New York-based investment banking company Jefferies Group noting a “massive inventory glut” in cardboard.

The bank also reports a sharp decline in orders for cardboard packaging and anticipates manufacturers such as International Paper, Memphis, Tennessee; Packaging Corp. of America, Lake Forest, Illinois; and Westrock, Atlanta, will slash prices in the fourth quarter of this year.

Because of the new containerboard capacity expected to come online within the next year, Jefferies says it expects the situation to continue to get worse in 2023. Projects like Domtar’s Kingsport, Tennessee, conversion of an uncoated freesheet printing and writing paper machine to produce 100-percent-recycled-content containerboard are reported to be on track, with the Fort Mill, South Carolina-based manufacturer telling the Kingsport Times News the project “is almost complete.”

Troy Wilson, general manager of the Kingsport mill, told the Kingsport Times News, “All our major equipment is in place, and we expect to resume operations at the plant during the fourth quarter.”

Pratt Industries, based in Atlanta, also has a $500 million paper mill and box factory under construction in Henderson, Kentucky, it says is on schedule. When the company announced the project, it said it expected construction of the paper mill to be complete in 2023.

A report in mid-September from WFIE 14 News in Evansville, Indiana, says the company still is in the process of securing the land to build its 700,000-square-foot corrugator plant to produce corrugated sheet and boxes, which it also expects to be complete by next year.

Additionally, Empire Recycled Fiber is in the process of retrofitting a facility in Dayton, Ohio, to produce 350,000 tons per year of recycled containerboard and says it expects it to be operational in 2024.

While Cascades’ Bear Island conversion in Ashland, Virginia, threatened to run into delays related to high costs and labor and material availability constraints, the project still is expected to come online by early next year, adding to the influx of containerboard capacity on the horizon.

Two companies achieve food-contact status for mechanically recycled-content PS plastic.

The Innotech research and development center for packaging operated by plastics producer Grupo Lantero has announced what it calls the successful completion of food-contact trials with polystyrene (PS) yogurt cup materials made by Ineos Styrolution and Coexpan.

The trials addressed formats used in both European and American markets using Styrolution PS ECO 440FC MR100 material, which Ineos describes as a 100-percent-postconsumer-recycled PS grade produced from household food packaging scrap. “All dairy formats have been produced and tested to food contacts standards,” Ineos says, calling PS “the material of choice for the dairy form-fill-seal market.”

While Ineos Styrolution helped develop and invest in the mechanical recycling system to produce the new material, Grupo Lantero division Coexpan, which specializes in the manufacturing of rigid plastic sheets and thermoformed products, will make packaging products from Styrolution MR100. 

“The trials at Innotech show that mechanically recycled PS is produced and successfully tested to food-grade standards across all shapes and sizes of dairy applications,” the companies say.

“It is a massive achievement to be able to confirm the success of this exercise, and the results speak for themselves,” says Gonzalo Sanchez, head of recycling at Spain-based Coexpan. “Many brand owners want the polystyrene journey to continue, and we now have the proof that mechanically recycled polystyrene offers a solution for their food contact applications. This will allow customers to concentrate on their core business rather than looking for alternative materials requiring changes to existing processes and investments into new equipment.”

“We have expected for quite some time that polystyrene is an ideal material for the circular economy," says Frank Eisenträger, product director at Germany-based Ineos Sytrolution. "Now we have the proof that it is indeed one of the best, if not the best recyclable polymer. In fact, polystyrene is all set now to enjoy the highest recycling rates of all polymers. I expect the quality of the mechanically recycled polystyrene to be so convincing that we will see applications that moved on to other materials switch back to polystyrene as new recycling capacities come online.”

Steel producer to invest $425 million to prepare sheet steel for auto industry.

Nucor Corp. says its board of directors has approved the construction of a galvanizing line at Nucor Steel Berkeley in South Carolina to support the company’s participation in the automotive and consumer durables (appliance) markets.

The $425 million investment is expected to yield a start-up date in mid-2025. Additionally, Nucor’s board approved a galvanizing line to be constructed in the western United States, “with details to be announced at a future date.” Currently, the farthest west Nucor has a sheet mill is in Arkansas, although it has bar mills in Arizona , Nebraska, Texas, Utah and Seattle.

“These investments support our strategy of shifting our mix to higher margin value-added products and capitalizing on sustainability trends that are driving opportunities for Nucor” says Leon Topalian, board chair, president and CEO of Nucor. “The new Berkeley line will complement our recent galvanizing expansions at our Hickman [Arkansas] and Gallatin [Kentucky] operations, and will be our eighth wholly-owned galvanizing line.”

The new South Carolina galvanizing line will have an annual capacity of approximately 500,000 tons and will be able to produce galvanized steel up to 72 inches wide, says the company.

“We would like to thank the State of South Carolina, Berkeley County, and [power provider] Santee Cooper for their support for this project,” says Mike Lee, vice president and general manager of Nucor Steel Berkeley.

Nucor, based in Charlotte, North Carolina, operates five sheet mills currently, has a sixth sheet mill under construction in West Virginia and additionally owns a majority stake in steel finishing firm California Steel Industries as well as a joint venture automotive galvanizing line in Mexico.

As an operator of electric arc furnace (EAF) still mills, Nucor refers to itself as “North America’s largest recycler,” and the company owns the Cincinnati-based David J. Joseph Co., which processes and brokers ferrous and nonferrous scrap via a multi-state network of yards.

Norwegian producer cites winnowing demand for reduced output in its home country; cutbacks join previous one in Slovakia.

Citing reduced market demand for aluminum billets in Europe, Norway-based Norsk Hydro says it will “partially curtail” aluminum production at its Hydro Karmøy and Hydro Husnes facilities in Norway.

“The decision will correspond to an annual production capacity reduction of from 110,000 to 130,000 metric tons of primary aluminum, including production recently taken out for ordinary maintenance and not yet restarted,” the company says.

Both Norwegian locations produce ore-based primary aluminum, though the company had been experimenting with using more scrap at the Karmøy facility.

The Hydro primary aluminum cutbacks in Norway join one made earlier this year at the company’s majority-owned primary smelter in Slovakia. In Slovakia, the firm continues to produce recycled-content aluminum.

“The extraordinary situation in the European economy and energy market is causing market uncertainty and a decline in demand for our aluminum products,” says Eivind Kallevik, executive vice president at Hydro. “Even if 50 percent of Europe’s primary aluminum production capacity has been curtailed during the last year, [the] recent drop in demand is causing a buildup of stock, forcing us to take firm actions.”

Kallevik continues, “While the short-term market trend is falling and uncertainty prevails, underlying market trends longer term will remain positive due to the rising need for aluminum in support of the European green transition. We believe that with Norway’s strong industry framework conditions, including access to renewable energy, Hydro’s Norwegian aluminum smelters are well positioned to capture the growing market for low-carbon aluminum.”

Delaying maintenance can be costly in the long-term, Sennebogen president says.

Scrap yard operators sometimes delay maintenance in the short-term or don’t fully understand what needs to be done to particular equipment, and according to Constantino Lannes, president of Sennebogen, a Germany-based material handling equipment maker, that type of approach can be costly down the road.

Lannes spoke at Scrap Expo in Louisville, Kentucky, during the Optimizing Scrap and Dismantler Yard Operations session Sept. 14 and advised those in attendance to take advantage of consulting services when it comes to preserving equipment life.

The overall goal of scrap yard consulting services is:

Sennebogen offers its own free scrap yard consulting service, and Lannes said services like the one his company offers provide an in-depth look at an operation to determine where improvements can be made.

Lannes said benefits of consulting services include cost and risk reduction, implementation of best maintenance practices and operational productivity and efficiency enhancements, to name a few, and stressed the importance of staying on top of preventive maintenance as a way to maintain efficient operations.

“Every dollar that you save in preventive maintenance will [end up costing] you $15,000 to $20,000 in repairs later,” Lannes said.