HOME | EDITORIAL CALENDAR | SUBSCRIPTION SERVICES | EVENTS CALENDAR | PAPER INDUSTRY LINKS | CONTACT US

Containerboard Market Tight, Can Price Hike Be Far Behind?

June 9, 2010 - Is this the tightest market in 15 years for containerboard? That's what industry analysts are asking, and say they're looking for another price increase announcement within the next 4-5 weeks.

“Hikes in January and April added $110/ton to domestic list prices. We expect the next attempt to be in the $40-50 per ton range with implementation slated between July 15th and September 1st," said Mark Wilde, senior analyst at Deutsche Bank covering the Paper & Forest Products sector.

Wilde points out that industry fundamentals remain strong: box shipments +4.8% y/y in April, operating rate equals 95%, domestic and offshore supplies are tight.

“While the debate about box prices remains lively, the reality is that box prices are indeed heading upward,” Wilde said.

And, conditions aren't tight just in the U.S. “Most European producers have announced a third price increase of EUR 50 per ton on unbleached kraft linerboard, effective June 1," Wilde said.

For U.S. exporters, strengthening of the U.S. dollar against the Euro will trim any benefit from the Euro price increase, Deutsche Bank analysts noted.

OCC prices to China continued falling, with prices down $5/ton this week (-$50/ton since May and -$90/ton from mid-March levels of $290/ton). Domestic OCC price fell $10/ton in May, DB reported.

SOURCE: Deutsche Bank




PaperAge. Copyright © O'Brien Publications, Inc. All rights reserved.