Second official linerboard increase in four months started in NA, as mills face costs, supply cut

Key takeaways:

• North American producers are pursuing a second formal linerboard increase in four months, faster than the typical five-month cadence.
• Roughly 10% and 3.9 million tons of US containerboard capacity were permanently retired from February 2025 through March 2026.
• Cost pressures mount as inflation hits a three-year high, OCC rose $5–10 per short ton and diesel jumped 50% to $5.259 per gallon.
• PCA reported legacy box demand up 4.5% in April and 3.5% in May, selling 90,000 tons of inventory across March and April.
• Packaging paper increases of $50–$60 per ton take effect July 1 and August 1 across multiple producers, including Smurfit Westrock and ND Paper.

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US linerboard prices are set to increase this month, in what uniquely would be a second formal increase in four months for North America’s open market.

Typically, even during the rambunctious demand of the COVID period in the spring of 2020 through first quarter of 2022, consecutive price increases were implemented over five months, not in four months, according to Fastmarkets research.

This time, North American producers are in a market where 10% and 3.9 million tons of US containerboard capacity was permanently retired in unprecedented fashion from February 2025 through March 2026.

Further, inflation is now at a more than three-year high based on the latest US Consumer Price Index (CPI) report, and manufacturing costs continue to rise as the war in Iran continues. US national diesel fuel pricing was up by 50% at $5.259 per gallon on Friday June 12 versus the national average on June 12, 2025. The fuel prices began surging as soon as the US entered the war in Iran on February 28.

US old corrugated container (OCC) prices also have increased on a steady uptick in the first half of this year. Levels nationally rose by another $5-10 per short ton at the FOB seller’s dock on June 5, according to Fastmarkets’ assessment.

The containerboard price increases came while overall demand for corrugated boxes was less than strong.

Fastmarkets’ assessment in February found a $20 per ton decline in linerboard that occurred from what started as box price discounting in December 2025, Fastmarkets learned from market sources. Then, producers raised their containerboard prices by $40 per ton in March and by $30 per ton for April for a net $50 per ton increase since the start of 2026. This two-phased increase was actually formally announced as one increase for $70 per ton, effective March 1. The decline in the February linerboard pricing delayed the increase into two parts into April, Fastmarkets reported.

Now, the linerboard price condition has improved as US box demand started to slowly improve in March and improved a bit more in April and May, according to reports.

At a Wells Fargo event on Wednesday June 10, Mark Kowlzan, chairman and chief executive officer of Packaging Corp of America (PCA), said that the company’s per day legacy box demand increased by 4.5% year over year in April, and increased by 3.5% in May.

Kowlzan told of the company implementing box increases for the net $50 per ton March/April price increase and moving forward this month with the second increase.

Kowlzan was unspecific when asked how much of the net $50 per ton increase in March and April was offset by higher costs. He did note that PCA costs were up in the second quarter compared with the first quarter this year.

PCA is the highest performing publicly traded containerboard and corrugated box company in North America by margin. The company runs a highly integrated system with very little open market containerboard tonnage.

A market analyst told Fastmarkets on June 10 that some integrated companies that were short on containerboard supply were buying or looking for tons on the open market this month.

This has all led to the double-barreled price increases, with two formally announced increases for containerboard and for unbleached packaging paper at nearly the same time. Four of the five largest containerboard producers by capacity in North America also make bag paper for packaging.

In both cases, if prices increase again this month and in July/August domestically, they will have risen by roughly $100 per ton for linerboard and by $100 per ton for major packaging paper grades since February in the open market in North America, based on Fastmarkets’ assessment. This would come after prices for both linerboard and packaging paper were mostly unchanged for a full year since the spring of 2025.

The last time North American containerboard prices rose almost as quickly was during the COVID period, when containerboard producers increased linerboard and corrugating medium prices four times over 17 months for a total increase of $220 per ton, according to Fastmarkets’ assessment.

Kowlzan told of tight supply and demand conditions for containerboard this week, with PCA selling 90,000 tons of inventory in March and April, which Kowlzan believed may have been a first for the company in terms of the amount of stock volume sold into the market in two months.

For the packaging paper, Fastmarkets learned from buyers and sellers of price increases starting July 1 and for August 1 from Smurfit Westrock, ND Paper, ProAmpac, Canadian Kraft, Canfor Pulp and Paper, McKinley Paper and Packaging and White Birch Paper.

Also, North Pacific Paper, which is now owned by International Paper (IP), announced a packaging paper price increase on June 11, effective on July 1.

IP closed its Campti, Louisiana kraft linerboard mill that also made some bag paper in February 2025, thus exiting the bag paper business. IP later sold three bag converting plants in the US to ProAmpac. Now, desiring additional recycled containerboard capacity, IP acquired North Pacific Paper Company (NORPAC) and is back in the paper bag business as well.

The packaging paper increases are either $50 per ton or $60 per ton, depending on grade and on the producer.

Packaging paper’s dynamics are different than the drivers for containerboard. In packaging paper, capacity is up by 15% since 2020 and e-commerce mailer demand for kraft and recycled packaging paper has increased demand in the US.

Even with the price increase fervor in containerboard and packaging paper, some linerboard sellers questioned if the increases can be held in place going forward. They told of possible push back on linerboard and box prices later this year from the runup, especially if there is overbuying and if box demand does not improve.

“We haven’t seen the inflation on pricing on the box side that we are seeing on the paper [linerboard and corrugating medium] side,” a national account buyer of boxes told Fastmarkets on June 12.

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