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The recent Fastmarkets Forest Products Asia Conference highlighted a major shift in global boxboard trade patterns.
As the European Union’s new due diligence regime — the EU Deforestation Regulation (EUDR) — tightens compliance rules for fiber-based products, Asian exporters, especially in boxboard, face increasing regulatory obstacles.
Panel discussions raised serious concern over traceability, geolocation data and certification timelines, with consensus that Europe’s “safe route” is no longer certain. Consequently, focus is shifting to alternative markets, with Latin America emerging as a strong candidate.
Latin America can offer scale and a potential market for the excess Asian capacity, but not without risks and challenges for Asian exporters. While Latin America accounts for less than 5% of China’s global exports, its share is increasing.
Mexico, despite imposing tariffs of 25-35% in 2024 against countries without trade agreements (affecting mainly China and Brazil), remains a key recipient, accounting in 2024 for more than 40% of total Chinese boxboard exports to Latin America.
However, the share of Chinese imports in Mexico dropped from 22% to 15%, with the US, Chile and Europe filling the gap, after the imposition of tariffs. To offset this decline, China is redirecting exports to other countries, such as Brazil, Argentina and Peru, increasing its market share there.
Apparent boxboard consumption in Latin America reached 3.46 million tonnes in 2024 and is projected to decline slightly to 3.41 million tonnes in 2025, with a slow recovery to 3.48 million tonnes by 2027.
In the first half of 2025, Chinese exports to the region reached nearly 170,000 tonnes, surpassing the same period in 2024, despite Mexico’s 25-35% tariffs being in place and lower demand in Mexico and Central America. Brazil, Argentina, Peru and others are being actively targeted with discounted offers priced below local grades.
In Mexico, virgin-paper imports, after tariffs, are traded at 30-40% discounts over domestic, recycled production.
Demand is volatile, as real disposable income and boxboard sales tend to move in tandem, and income growth is slowing, or new consumer habits are draining liquidity from the real economy.
Growing economic inequality and still high levels of food insecurity in the region mean gross domestic product (GDP) growth does not always translate into packaging demand, limiting boxboard sales.
Inventory strategies are lean, and digital consumption is rising. Spending is increasingly diverted to online betting and e-gaming, away from traditional boxboard end uses such as toys and cosmetics.
Mexico, the region’s demand bellwether, is slowing, as credit offerings are tight, domestic offtakes are weak, and the unwinding of tariffs is complex. Additionally, trade friction is a reality: Brazil’s exports to Mexico plummeted from 25,000 tonnes in January-July 2024 to under 2,700 tonnes in the same period of 2025, due to the tariffs imposed by Mexico in 2024, leaving room for others to capture that market share.
As mentioned, previously, the Chinese presence there remains significant, although it is gradually eroding.
As more disposable income is channeled into digital experiences, spending on physical goods, such as toys, cosmetics and packaged foods, declines. These are core end uses for boxboard, and their erosion directly impacts demand. This behavioral shift is not cyclical; it’s structural. It reshapes the consumption basket in ways that traditional packaging forecasts must now take into account.
Mexico’s economic deceleration is another risk, as the country is the region’s largest importer, and its economic slowdown adds another layer of uncertainty. Domestic demand is soft, export-oriented industries are slowing down, and access to credit is becoming tighter.
Despite the resilience of Chinese imports, Mexico’s share of Chinese boxboard imports into the region has been declining, raising questions for which there is no clear answer: will it decline to minimal volumes, as was the reality five years ago before the new capacity wave started in China? Or will China be able to secure and maintain its position in the US’s strategically located manufacturing hub?
In sum, while Latin America presents a viable outlet for Asian boxboard overcapacity, it is far from a guaranteed solution. The region’s scale and price sensitivity offer short-term opportunities, but demand volatility, shifting consumption patterns, and policy risks must be carefully managed.
Exporters should view Latin America as one component of a diversified strategy, rather than a singular solution. Continuous monitoring of trade flows, local market signals and regulatory developments will be essential to navigating this complex and evolving landscape.
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