OCC Pricing in Q1 2026: From Five-Year Lows to Early Signs of a Rebound

The U.S. recovered fiber market entered 2026 at its weakest point in half a decade. Fourth-quarter 2025 data from the Northeast Recycling Council (NERC) showed MRF commodity values falling to $68.41 per ton without residuals — the lowest level since Q4 2020. Old Corrugated Containers (OCC), the single most traded recovered paper grade in the world, was at the center of that decline. But as Q1 2026 draws to a close, the market is showing unmistakable signs of a turn. This article examines the data, the drivers, and what operators on both sides of the transaction should be watching.

The Numbers: Where OCC Prices Stand Today

As of mid-March 2026, the U.S. national average for OCC sits at approximately $46.88 per short ton, according to NERC data. Recycled Mixed Paper (RMP) trails at $20.31 per ton. These figures represent the tail end of a prolonged decline that accelerated through the second half of 2025.

However, the trajectory has shifted. In the first week of March 2026, Fastmarkets RISI — the industry's primary pricing benchmark — reported $1 to $5 per ton price increases for OCC across multiple U.S. regions. The increases were attributed to seasonally slowed generation and transportation challenges that restricted materials collection and movement.

This is not a dramatic spike. It is a measured correction after months of sustained decline. But in a market where even small shifts in supply or demand can move prices quickly, the direction matters more than the magnitude.

What Drove the Decline

To understand the rebound, you need to understand the fall. The second half of 2025 was defined by three converging pressures.

Weak industrial production. U.S. manufacturing output remained subdued through much of 2025, which directly reduced the generation of industrial-grade OCC. When factories produce less, they generate less corrugated packaging waste. This sounds like it should tighten supply and support prices — but the effect was more nuanced. Reduced industrial activity also meant reduced demand for recycled paperboard, which is the primary end market for OCC. Mills that consume OCC to produce linerboard and medium were running at lower utilization rates, reducing their appetite for raw material.

Oversupply from residential collection. While industrial generation slowed, residential curbside collection remained steady. E-commerce volumes continued to grow, meaning households were generating significant quantities of corrugated packaging. This created a supply mix that was heavier on lower-quality residential OCC and lighter on the cleaner industrial grades that mills prefer. The result was downward pressure on average prices.

Export market softness. China's National Sword policy, implemented in phases starting in 2018, permanently reshaped global recovered fiber trade flows. China went from importing approximately 30 million tonnes of recovered paper annually to near zero. Southeast Asia and India absorbed much of that volume, but their demand has been inconsistent. Through mid-to-late 2025, export demand from these regions was tepid, removing a key price floor for U.S. OCC.

What Is Driving the Recovery

The March 2026 price increases, while modest, are supported by several structural factors that suggest the bottom has passed.

Seasonal Supply Tightening

Winter weather consistently disrupts collection logistics in the northern United States. Snowfall, road conditions, and shorter operating hours at transfer stations reduce the volume of material reaching MRFs and mills. This seasonal effect is well understood, but it is real — and in a market already operating at thin margins, even a modest supply reduction can shift pricing.

Sonoco's $70/Ton Price Increase

On April 3, 2026, Sonoco Products Co. will implement a $70 per ton price increase for all grades of uncoated recycled paperboard (URB) in the U.S. and Canada. Sonoco is one of the largest consumers of OCC in North America, with $7.5 billion in annual sales and approximately 22,000 employees across 265 operations in 37 countries.

Taylor Lane, Vice President and General Manager of Sonoco's Industrial Paper Packaging North America business unit, cited "tightening market conditions, increased mill utilization rates, and inflationary input costs" as the drivers. When a buyer of Sonoco's scale raises prices on its output, it signals that the company expects to pay more for its input — which is OCC. This is a leading indicator.

Export Demand Expected to Accelerate

According to IMtrade's March 2026 market report, demand from Southeast Asia slowed noticeably in the second half of February. Indonesia and Malaysia reduced purchasing activity, largely due to the Ramadan period, which traditionally results in lower trading volumes. With Ramadan ending in the third week of March, activity from these regions is expected to increase.

India has remained stable, with export OCC (95/5 grade) pricing at approximately USD 155 per metric ton CNF. Indonesia and Malaysia are at USD 148–150 per metric ton CNF. These markets now account for over 70% of global waste paper imports, making their purchasing patterns the single most important external factor for U.S. OCC pricing.

European Market Signals

The European OCC market provides useful context. In Germany and the Benelux, OCC spot prices range between EUR 105 and EUR 120 per ton delivered to mill. IMtrade's analysis is direct: "On the surface, supply and demand appear balanced. In reality, this balance is fragile. Underlying volumes are not abundant, and relatively small shifts in demand can have a disproportionate impact on pricing." Their conclusion: "Upward potential currently outweighs downside risk."

European testliner producers are also seeking price increases of EUR 30–50 per tonne to recover compressed margins — another signal that the recycled fiber value chain is tightening from the demand side.

The IEEPA Factor

One wildcard that could significantly affect OCC markets in 2026 is the IEEPA tariff refund process. The Supreme Court's February 20, 2026 ruling struck down tariffs on imports from China, Canada, and Mexico. Approximately $166 billion in duties are now subject to refund.

If refunds are processed efficiently, the resulting cash injection into U.S. importing companies could stimulate purchasing activity across supply chains — including demand for packaging materials and, by extension, recycled paperboard and OCC. Conversely, the removal of tariffs on Chinese goods could increase competition for U.S. recycled paperboard producers, potentially affecting domestic mill utilization and OCC demand.

The net effect is uncertain, but the IEEPA situation adds a layer of macro-level unpredictability to an already complex market. Companies involved in recovered fiber trading should be monitoring both the refund timeline and the trade policy implications closely.

Shipping and Logistics: A Persistent Headwind

Global shipping disruptions continue to affect recovered fiber trade. Instability in the Middle East has impacted key maritime routes including the Strait of Hormuz, the Red Sea, and the Suez Canal. Shipping lines have reported higher insurance premiums and, in some cases, rerouting of vessels via the Cape of Good Hope — adding weeks to transit times and substantially increasing fuel costs.

For OCC exporters, these disruptions translate directly into higher delivered costs and longer payment cycles. Container rates, delivery times, and end prices are all affected. Europe, which is heavily dependent on energy and goods imports through the Suez Canal, is particularly exposed. U.S. exporters shipping to Southeast Asia face similar challenges depending on routing.

What Suppliers Should Be Doing

If you are a recycler, MRF operator, or recovery facility generating OCC, the current environment favors patience and preparation.

Hold where you can. With prices at or near cyclical lows and multiple indicators pointing upward, this is not the time to accept distressed pricing. If your storage capacity allows, holding inventory for 30–60 days could yield meaningfully better returns.

Focus on quality. The price differential between clean, well-sorted OCC and contaminated material widens during tight markets. Mills paying more for input will be more selective. Investing in sorting quality now positions you to capture the premium when prices rise.

Diversify your buyer base. If you are selling exclusively to domestic mills, explore export channels. Southeast Asian demand is expected to accelerate post-Ramadan, and having established relationships with export buyers gives you optionality when domestic prices lag.

What Buyers Should Be Doing

If you are a mill, converter, or trading house purchasing OCC, the signals suggest that the buying window at current prices is narrowing.

Secure supply now. Sonoco's $70/ton price increase on URB is a clear signal that major consumers expect input costs to rise. If you need OCC for Q2 production, locking in supply at current levels is prudent.

Watch Southeast Asia. Post-Ramadan demand from Indonesia, Malaysia, and India will compete directly with domestic buyers for U.S. OCC. When export demand strengthens, domestic availability tightens and prices rise. The timing of this shift — likely late March to early April — is worth monitoring closely.

Plan for logistics costs. Shipping disruptions are not going away in the near term. Factor higher freight costs into your landed cost calculations, and consider whether domestic sourcing offers a cost advantage over imported material in the current environment.

The Outlook: Cautiously Upward

The OCC market in Q1 2026 is at an inflection point. The five-year lows of Q4 2025 appear to have established a floor. Seasonal supply tightening, Sonoco's price increase, expected post-Ramadan export demand, and fragile European supply-demand balance all point in the same direction: upward.

This is not a prediction of a dramatic price spike. The structural challenges — weak industrial production, shipping disruptions, and the uncertain impact of IEEPA policy changes — remain real. But the balance of risk has shifted. As IMtrade put it: "Upward potential currently outweighs downside risk."

For operators on both sides of the transaction, the message is the same: the market is moving, and positioning matters. The companies that are prepared — with organized inventory, diversified relationships, and clear visibility into their cost structures — will be the ones that capture value as the recovery unfolds.

Conglobus International tracks OCC market conditions daily. If you are a supplier looking to move material at the right time, or a buyer looking to secure supply before prices rise further, contact us to discuss your position.