Over the past six months, Asian, European and North American folding carton manufacturers, paper and containerboard mills have announced price hikes in CRB, SBS, SUS, Natural Kraft (Kraftpak) and URB (Chipboard). Paper mills have increased their prices by US$50 to US$75/tons. The price increase were justified by paper makers, by extraordinarily rapid inflation in our input costs, especially for recycled fiber, chemicals and other operating costs. And the main driver for the price hike is the shortage of old corrugated container (OCC) supply. Because of this situation, mills are using mixed grades and high end grades to fill the gap. The decline of newsprint is also reducing the supply of recycled fiber for container board producers.
Forestweb reports that worldwide pulp markets remain firm and that supply and demand are “well enough balanced” to encourage producers to consider price increases. RISI expert explained recent coverage of global paper markets has focused on cost inflation, especially the contributions of skyrocketing recycled fiber costs and the effect of the strong US dollar.
On the longer term, prices are set to increase
There are also rumors in the market that additional price hike announcements for pulp and packaging will take place in April. On the longer term, prices are set to increase because of the direction taken by the waste-recovery systems. Single stream collection (all recyclable waste through the same collection stream) is growing faster than separated streams, making more collected board at risk of being contaminated, and hence costlier to recycle.
These price increase puts a tremendous pressure on folding carton manufacturers who started looking for alternatives supply all over the world. CartonHub can help you qualify new alternatives and hedge your raw material price hike risk. Since raw material represent a significant cost of folding carton packaging, we can expect in the near future important changes in the market and an increased competition coming from new mills.
Source: ForestWeb, RISI, EUWID