Tagged "corrugated market"
New increase in the cost of corrugated
The price of corrugated packaging is expected to increase between 8 - 14% over the next 1-2 months. At the start of 2022, North American producers of containerboard began announcing price increases as a result of consumer demand and wider supply chain issues. The increased cost of containerboard, the largest material component of corrugated products, is the main driver of rising prices.
There is some optimism that 2022 will not see as many price increases as 2021, but this is dependent on improved stability in the industry.
If you'd like to know more about the different cost drivers for your boxes, see this guide.
You can also visit the Lumi Corrugated Tracker for live updates.
Price increase for paper-based products
Manufacturers on Lumi are reporting that North American containerboard mills have implemented yet another $50 per ton increase on linerboard and $60 on medium. This is the third price increase of this kind since November 2020. Visit the Lumi Corrugated Tracker for live updates.
Historic demand fueled by consumer spending and a shift to ecommerce home deliveries is behind the increase. Paper supply remains tight, there is a shortage in labor and other input costs, such as freight, continue to rise.
Price increases vary by manufacturer, but range between 7 to 12%. Please message the manufacturers you work with to understand how the price increase impacts your products.
In Q3 2021 the cost of paper-based products will increase, likely between 7-11%.
Four of North America's largest six integrated container board producers announced price increases in June. Increases will roll out from mid-July through September.
Materials impacted: Virgin corrugated medium, liner board, and SBS will rise $50-70/ton effective mid-July. Pricing for recycled fiber is also expected in increase for the second month in a row starting mid-July.
Products impacted: All paper products produced in the US, including boxes, paper collateral, paper mailers, publications, paper stickers and labels, paper tape, paper tubes, and paper void fill.
What's driving the increase? The latest industry wide increases on all fiber substrates are driven by increasing demand and raw material costs.
More to come: Delays in the supply chain have created even more strain, reducing material availability. This may may stretch lead times from material manufacturers to paper manufacturers, and the delays could trickle down to customers.
Adhesive shortage impacting some lead times
An adhesive shortage is occurring nationally due to the historic winter storms last month in Texas and across the Gulf Coast region. Adhesives are an important component in numerous packaging products including tape, folding cartons, and corrugated containers. Key raw materials and intermediates used to manufacture adhesives are byproducts of the petrochemical industry, which was hit hard by forced operational shut-downs due to the cold weather. The storms exacerbated existing issues in the adhesives supply chain, including already low inventories due to increased ecommerce demand, and limited availability of freight capacities.
While most petrochemical operations have restarted, US American Adhesive and Sealant Council (ASC) indicated US supply chains will take weeks or even months to recover after such a major disruption.
We are monitoring the situation and will contact those directly affected by the shortage. We advise placing all orders as soon as possible to help mitigate any delays.
Price increase for corrugated products in North America
Several major North American producers of containerboard have recently increased linerboard prices by $50-$70/ton. Though not universal, this recent round of increases is already being adopted by several integrated and independent corrugated manufacturers.
Learn more about corrugate price changes using the Lumi Corrugated Tracker.
While corrugated increases are expected a couple times a year, this situation is slightly abnormal because the increase is being driven by tight supply and sustained increase in demand, which has not let up despite the holiday season coming to an end. These issues are compounded by the rise in input costs and unpredictable shortages in labor due to COVID-19.
Please reach out to your Customer Success Manager to understand how the price increase impacts your products.
Price increase for corrugated products in North America
This month, containerboard prices have increased by an average of $50/ton. The major North American producers of containerboard cite strong demand for corrugated products and the rising cost of transportation, energy and insurance as reasons for the increase.
Learn more about corrugate price changes using the Lumi Corrugated Tracker.
Containerboard is the largest material component of corrugated products. As a result corrugated manufacturers across North America have increased prices. Price increases vary by manufacturer, but range between 6 to 10%. For some manufacturers the increase is effective immediately, for others it will take up to 90 days.
Please reach out to your Customer Success Manager to understand how the price increase impacts your products.
Paper mills announce linerboard pricing twice a year, typically from February through March and September through October. We post all updates to linerboard pricing on our Corrugated Price Tracker.
We expect linerboard pricing to increase by $50/ton at the end of March, and this will increase the price of corrugated boxes by end of April 2018. At a glance, here are the predominant factors that are driving the pricing increase:
Reasons cited by mills for this particular increase include freight costs, moderate demand growth, and mill capacity. Domestic freight costs are at an all time high and the highest they’ve been since 2015, according to data from the U.S. Bureau of Labor Statistics. Demand continues to moderately increase a few percentage points per year, driven largely by the ecommerce sector. Current mill capacity utilization is at 93%-98%, so any growth is strains demand. (For reference, full capacity is typically considered to be around 85%, since 100% volume renders a factory inoperable.)
These are the predominant factors for the increase, but there are certainly other factors at work here as well. Notable, significant acquisitions on both the mill and converting side over the past year, and export paper pricing is at a high point.
