Containerboard and Box Shipments Still Weak

Sept. 17, 2009 - August containerboard and box numbers show that shipment volumes remained extremely weak, Deutsche Bank analysts reported.

Inventories remained about flat in August from July. The normal seasonal pattern in August is a modest decline in inventories.

Trade flows improved slightly, the analysts said.

“These numbers do nothing to change our view that a price hike initiative in the fall is unlikely,” said Mark Wilde, Senior Analyst at Deutsche Bank covering the Paper & Forest Products sector.

Shipments Remain Weak
Box shipment volumes declined 9.6% y/y in August. “We consider this a fair year-over-year comparison because August 2008 had the same number of shipping days as this year,” noted Wilde. “This is roughly in-line with the 9.4% decline that we saw in July, as well as the YTD 'blended' (midpoint of actual and average week) comparison of -9.9%,” he said. “However, we consider the lack of improvement disappointing given the steady improvement in the ISM index in recent months.”

Inventories Flat in August
Combined mill and box plant inventories fell just 1,000 tons in August from July. Measured in terms of weeks of supply, the number remained flat at 3.6.

Looking over the last 10 years, inventories typically fall by an average of 24,000 tons m/m in August, implying a negative variance of 23,000 tons. Total inventories now stand at 2.32 million tons, still near the low end of a normal historical range, Wilde said.

SOURCE: Deutsche Bank

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