Written by L. Park, Sustainability
Old corrugated containers — OCC for short — are graded by the recycling industry on a scale that almost nobody outside the industry understands. Every two weeks a publication called Official Board Markets publishes regional prices for OCC bales, and those prices ripple through everything from your municipal recycling rate to the unit cost of a new shipping box.
The grades.
OCC is graded by the ISRI standard. The two grades that matter for most readers are #11 (regular OCC, baled, contains some contamination) and #12 (double-sorted OCC, much cleaner, sells for a premium). There are also specialty grades like double-lined kraft cuttings, but those mostly come out of converters, not waste streams.
The prices.
OCC #11 has bounced around between $30 and $200 per ton over the last decade, with regional differences of $20-$40 depending on how close you are to a paper mill. Right now (early 2024) we are seeing $80-$120 per ton in the Rocky Mountain region. This number tells us, roughly, what we get when we sell our baled OCC to a downstream mill.
Why prices swing so much.
- Mill demand. When new linerboard is in high demand, mills pay more for OCC.
- Export demand. China used to be the biggest buyer of US OCC, then changed import rules in 2018, which crashed the price for years.
- Domestic production. New mills coming online raise demand and prices.
- Contamination rates. Cleaner bales fetch a premium over dirty bales.
- Freight. OCC is heavy and not very valuable per ton, so freight costs eat margin fast.
What this means for you.
If you are a generator of waste corrugated, the OCC price is the floor under what your bales are worth. A broker like us can sometimes do better than that floor by cleaning up the loads, sorting out reusable boxes, and selling the OCC fraction to a high-paying mill. If you are a buyer of new corrugated, the OCC price is one of three or four upstream costs that influence what you pay for your boxes — when it spikes, your box prices spike too.
The bottom line.
OCC prices matter, but they are not the whole story. For most of our customers the more important metric is reuse rate, not bale price, because reuse takes a box completely out of the OCC market. The only thing better than a high OCC price is not needing to bale the box in the first place.