Containerboard Pricing Up and Down, Recycled Board Remains Strong

April 26, 2011 - Containerboard prices in April were reported to be flat, say analysts at Deutsch Bank (DB).

"Sadly, figuring out what constitutes 'the price' has become a bit like trying to read the Soviet-era Kremlin," said Mark Wilde in DB's Dr. Paper's Pulse on Pricing report.

According to DB's report, this past weekend the trade papers point to linerboard "transaction” prices stable at $530-550/ton, net of discounts, (tier-2 producers = $510-520/ton in some markets), “list” price at $685-695/ton, and a third price of $635-645/ton — one single commodity, 3 (or 4) different prices.

"If you're confused, so are we," Wilde said. "Reliable trade sources have been reporting increased discounting in the box market. Initial Q1 results suggest that we ought to focus more on results rather than the trade papers," Wilde noted.

Is the erosion destined to continue? "We don't think so. Better-than-expected March box shipments, falling inventories in Q2, higher exports and rising input costs could prompt a price hike in Q3, Wilde said.

Recycled Board
Coated Recycled Board (CRB) prices rose $30/ton in April to $900-920/ton (announced =$40/ton). DB said that several factors are into play — strong CRB demand, escalating input costs and supply tightness from maintenance shutdowns.

"Trade sources report that producers remain disciplined — unlike previous periods when they undercut quotes," Wilde added.

SOURCE: Deutsche Bank