Paper packaging price and cost: What happened when production costs surged in 2022?

Understand how box prices have evolved by modelling cost and price indices for paperboard material

2022 was a challenging time for paper packaging producers. The cost to produce boxes went on an upward trajectory, while pressure from buyers kept the prices relatively grounded.

In normal circumstances, rising costs are usually met with commensurate increases in the price of products to ensure profitability. However, in the last couple of years, the market price for the paperboard material to make the corrugated boxes had not quite caught up with this rise in the cost to produce them. As a result, the integrated box producers were faced with squeezed margins.

This turning point in the market can be illustrated by our Index Builder model. It calculates how the cost of producing the box evolved based on two different perspectives:

  1. The evolution of the prices of the paperboard material using our price data
  2. The evolution of the cost to produce the paperboard material using our cost benchmarking tool, Analytical Cornerstone

In our example, we take a look at the cost evolution of corrugated packaging in Europe using two types of containerboard – recycled liner and recycled medium – and a box price starting point of EUR100 per 1000 pieces from 2020 to 2023.

Click through the charts below to see the cost evolution story.

This increase in cost was caused by several macroeconomic and geopolitical drivers, including inflation, the war in Europe, supply chain challenges and Covid-19. Consequently, the price of energy, fiber, labor, chemical and other cost factors had skyrocketed.

While we have moved away from the peaks in 2022 and cost drivers such as energy and fiber prices have become more stabilized, it is important to keep in mind that these market conditions could turn again in the near future. For Europe, there is still uncertainty surrounding energy security for mills and the war in Europe. The appearance of another macroeconomic or geopolitical event could also change the market conditions we see today.

Our Index Builder model combines our trusted and benchmarked price data with our industry-leading mill intelligence database. It can give you a clearer view of what is happening in the market and, in turn, insights into what factors are influencing the price of your packaging product.

Find out how our Index Builder model can help you today by speaking to our team or scheduling a demo.

Case Study

Learn how to monitor packaging prices using cost and price indices and understand the underlying cost drivers, from material cost to labor, energy and more. Examples include cartonboard, liquid container and paper bag.

What to read next
Financial incentives for companies developing silicon-based anodes in Europe are helping to support the sector, but the focus on innovation, not scale, risks them falling behind North America, experts told Fastmarkets.
In an unusual, awkward marketplace where demand was mixed, and one large producer this week even announced mill and sheet plant permanent closures, linerboard prices increased narrowly by $40/ton in North America’s open market, according to a survey of buyers and sellers by Fastmarkets’ PPI Pulp & Paper Week. Looking to stay updated on price trends […]
Upward pricing pressure for US old corrugated containers (OCC), new double-lined kraft corrugated cuttings (DLK), and mixed paper showed no signs of slowing down, maintaining yearlong pricing increases that improved US OCC’s average further above its 10-year average to $91/ton in February 2024. Want to know what’s behind your packaging price? Our cutting-edge Index Builder tool […]
Fastmarkets FOEX would like to thank for the feedback received during the consultation period. It was fully supportive to our current methodology. To summarize, this open consultation does not lead to material changes in the current methodology. A newly dated methodology document will be soon posted.
Fastmarkets’ 2024 outlook for key raw materials and ingredients used in the production and distribution of fast-moving consumer goods
Analyzing trends, outlooks and influential factors in the global palm oil market