In an effort to keep you informed and up-to-date, we wanted to share this recent letter from Barry Froman, owner and president of Recycle 1 in Arizona. This letter was emailed to all our paper suppliers and features timely and important information about the current state and anticipated future conditions of the international waste and recovered paper market. Be sure to stay tuned to our website, where we’ll continue to keep you posted on market conditions.

October 8, 2019

FROM: Barry Froman—President—Recycle 1 Companies

SUBJECT: Updates in the Paper Market

Our valued customers and suppliers:

As we reported earlier this year, the waste and recovered paper market is in a severe downturn. We continue to see prices either decline or stagnate, both here in the United States and around the world. Simply put, there’s just too much paper.

Mills everywhere are overloaded, and prices are reflective of that oversupply. Demand in the United States and abroad, including in Asia, has dwindled in response, and facilities everywhere continue to struggle to find buyers.

That means that movement is a higher priority than price, despite grade. Prices for high grades, sorted office paper (SOP) and pulp substitutes continue to drop. For instance, in the United States, national SOP prices have fallen from $220 per ton in October 2018 to $105 per ton in August 2019.

If markets and prices continue on this downward trend, recycling fees will continue to rise, and in some cases, recycling will be cost-prohibitive. One example that’s close to home: Here in Arizona, the city of Surprise has suspended its recycling program due to rising costs.

Despite these challenges, we continue to buy and move product at Recycle 1 and Arizona Pacific Pulp & Paper and are committed to providing the best possible prices and service. We appreciate your business and patience during this time, and encourage you to contact us with any questions.

Sincerely,

Barry Froman

President

Recycle 1 Companies