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The next round of price hikes by fiber board producers could be about to start, analysts project, mirroring the waves of fiber price increases that peppered 2024. This comes as a leading index indicates board pricing didn’t move in April.
This month, containerboard and boxboard prices remained flat sequentially, according to pricing data in Fastmarkets RISI’s Pulp & Paper Week publication on Friday. Current demand also appears mostly unchanged, although “[c]onditions appear to be softer than last fall due to a tariff-related pullback in orders in February and early March and general uncertainty in the market,” said a Truist Securities note to investors on Sunday, citing the Fastmarkets RISI information.
Further, “the typical spring seasonal uptick has yet to materialize” for containerboard, according to Truist. Bloomberg Intelligence noted last week that analysts are watching a similar trend: If the seasonal uptick in box demand does not occur as usual, it could be a harbinger for a potential broader recession, suggested Ryan Fox, corrugated packaging market analyst.
PPW also reported that Graphic Packaging International announced a $40 per ton price increase for coated unbleached kraft and coated recycled paperboard effective May 15, Truist’s memo noted. That could signal the start of another widespread round of boxboard price increases. “[T]ypically other producers follow once an increase has already been announced,” said Michael Roxland, Truist Securities senior paper and packaging analyst, via email Monday.
BofA Securities also mentioned the likelihood of upcoming price increases in the report it released April 16 featuring results from its corrugated box converter survey from March 17 to April 11. The overwhelming majority of survey respondents — 90% — expect the next containerboard price increase to occur this year, with 15% expecting it in Q2, 45% in Q3 and 30% in Q4.
When asked whether a containerboard price hike would be good or bad for their business, 37% said it would be good, which is down from 43% in April 2024 during BofA’s last full box survey. “This potentially reflects concerns about inflation and its impact on broader demand trends,” the report says.
Containerboard and boxboard manufacturers already tried for price increases in January, but Fastmarkets RISI’s index showed price trends in both categories remained flat that month. In February, the index only showed a partial increase for containerboard and none for boxboard. The lack of full recognition prompted industry observers to liken the activity to what occurred in 2024, when containerboard prices partially rose and boxboard stayed put — resulting in manufacturers making multiple attempts at hikes.