Kraft Linerboard Prices On the Move Upward in Europe

July 24, 2012 - Linerboard price increase announcements around Europe continue to pop up. Swedenís SCA just announced a EUR 60 per metric ton hike on all grades of kraft linerboard, effective September 1.

According to Deutsche Bank (DB), SCA has become a large merchant supplier to the European converting market as a result of the recent sale of its European converting plants to DS Smith. SCA produces 800,000/mtons of kraft liner at two mills in Sweden.

DB pointed out that Spainís Europac last week announced a EUR 50/mton hike in all European markets, effective August 1. A week earlier, Mondi announced a EUR 40/ton hike for brown kraft linerboard and substitute grades around the Mediterranean and indicated that hikes would be forthcoming on other grades and in other regions of Europe.

The moves come amidst long-term and short-term cuts in European kraft liner supply, DB noted. This past spring, Norwegian kraft liner producer Peterson filed for bankruptcy and idled a 290,000/mton mill in Moss, Norway. More recently, a ruptured black liquor tank has idled Smurfit Kappa Groupís 520,000/mton kraft linerboard mill in Facture, France. Reports suggest that the SKG mill (one of the largest in Europe) will be out of commission for approximately 1 month, DB said in a statement.

Europe's Pricing Should Help US Producers
"Over the past 10 days, virtually all of the US containerboard producers have announced price hikes of [about] $50/ton. Since exports account for 15-20% of US kraft linerboard production — the primary US containerboard grade — rising offshore price levels should aid the effort to boost domestic pricing," DB concluded.

SOURCE: Deutsche Bank