Price increases appear to be finished for the year, as analysts point to continued improvement in volumes while the industry pulls up from the post-pandemic “cardboard box recession.”
Sales volumes are ticking up as the fiber packaging industry recovers from the depths of the post-pandemic “cardboard box recession,” according to analysts’ reports. But don’t expect the rebound to be speedy.
BofA Securities and other industry observers started signaling this summer that a turnaround might be afoot. Now, they’re more confident in declaring improvements.
“We are in an early stage of expansion after a two-year packaging recession,” and BofA’s outlook points toward a soft landing, according to an Oct. 17 note to investors from BofA Securities research analyst George Staphos.
In the meantime, newly released data suggests fiber packaging pricing remains flat. Fastmarkets RISI released its monthly containerboard and boxboard pricing data on Oct. 18, showing largely unchanged pricing in October compared with September, similar to the prior month’s trend. Approximately 90% of buyers and sellers reported no pricing changes.
Demand also held steady, unchanged from the previous month, despite minor output impacts from Hurricanes Helene and Milton. Mills largely escaped from the storms unscathed. For instance, both International Paper and Smurfit Westrock confirmed via email in early October that they had minimal operational impacts following Helene.
Although Cascades announced in mid-September that it would implement a $40 per ton increase for linerboard, $70 per ton for medium and $40 per ton for white top linerboard effective Oct. 7, the attempt appears unsuccessful, per the Fastmarkets RISI data.
In an Oct. 20 commentary highlighting the new Fastmarkets RISI data, Michael Roxland, senior paper and packaging analyst at Truist Securities, noted that other leading producers, such as International Paper and Smurfit Westrock, have not followed suit with a third round of price increases. Previously, he stated in an Oct. 15 commentary that Cascades’ increase “needs the support of the larger integrated players” to take hold.
Greif and others had indicated during earnings calls this summer that they wouldn’t pursue additional price increases this year. However, most of the major players participated — at least to some degree — in two rounds of price increases in 2024, with the most recent occurring in June from companies including Georgia-Pacific and Pratt Industries.