If you buy used corrugated packaging more than once a year, you have noticed that the prices move around. The drivers are not mysterious, but they are not on most buyers' radar either. Here is a walking tour of the levers.
Old corrugated cardboard pricing
OCC — the trade abbreviation for old corrugated cardboard, the raw material of the corrugate recycling market — is a commodity traded by the ton. Its price moves with global pulp demand, mill capacity, virgin-wood fiber prices, and the secondary market for recycled paper goods.
In the last decade, OCC has traded as low as the high $20s per ton and as high as $190 per ton. Most of the moves are driven by Chinese demand. When China was the world's largest buyer of US-recovered OCC, prices in our region tracked Chinese mill demand closely. When China's 2017–2018 import restrictions kicked in (the "National Sword" policy), domestic OCC prices crashed. They have since recovered as domestic pulp and packaging mills expanded capacity, but the volatility is permanent now.
What this means for used-Gaylord pricing
Used Gaylord boxes are sold on a per-box basis, not a per-ton basis. But the per-box price floats with OCC prices because the off-grade portion of any inbound load gets monetized through the OCC market. When OCC prices are low, our recycle-stream revenue falls, and the price we can pay for inbound loads adjusts down. When OCC prices are high, the opposite.
This is why we do not publish a fixed per-box buyout rate. The accurate rate depends on the OCC market state when your load arrives, the grade mix of your load, and the freight cost to pick it up. We can run those numbers and quote you in writing within a day. We cannot publish a number that holds for six months.
Mill demand and route geography
The most important non-OCC variable is which mill can take your bales. Wisconsin has good infrastructure — we have several mills within 60 miles. Indiana and Michigan have specialty mill capacity. Illinois has good shredding capacity. The closer the mill, the better the economics for us, and the better the price we can pay for your inbound load.
The macro picture
Long-term, demand for recycled corrugate is going up, not down. Consumer-product brands have made commitments around recycled fiber content. Regulatory pressure on virgin-wood fiber is increasing in Canada and parts of the US Pacific Northwest. The structural tailwind for OCC pricing is real, but it does not stop the short-term cycles.
The takeaway: used Gaylord pricing is dynamic, and the right vendor is one who can explain what is moving the price this month. If your vendor only ever says "market conditions," ask for a second opinion.