Top forest products stories this week, April 5 2022

North America to add two million tons of containerboard capacity, PfR prices surge in Europe, Pixelle to be acquired by H.I.G., and North American framing lumber prices fall

Two million tons of NA containerboard capacity set for startup in the next 8 months


After two years of the biggest US box demand growth in 27 years, new containerboard capacity additions continue to be announced.

  • ND Paper says they expect to be running a machine that can make 500,000 tons per year of recycled containerboard and recycled unbleached kraft bag paper by year end
  • The five confirmed announcements include Domtar in Kingsport, TN; Cascades in Ashland, VA; Packaging Corp of America (PCA) in Jackson, AL; Atlantic Packaging in Whitby ON; and ND at Biron
  • PCA, the third largest containerboard producer in North America, is expected to incrementally add capacity from the second half of 2022 into 2023

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Fiber-based specialty solutions leader Pixelle Specialty Solutions to be acquired by H.I.G. Capital


Pixelle Specialty Solutions Holding LLC (“Pixelle” or the “Company”), a leading provider of fiber-based specialty solutions in North America and portfolio company of Lindsay Goldberg, today announced that it has signed a definitive agreement to be acquired by an affiliate of H.I.G. Capital (“H.I.G.”), a leading global alternative investment firm with $48 billion of equity capital under management. Terms of the transaction were not disclosed.

  • Pixelle was formed in 2018 by Lindsay Goldberg, a private investment firm that focuses on partnering with families, founders and management teams seeking to actively build their businesses
  • In less than four years, Pixelle has transformed into a leading specialty-focused paper producer in North America
  • Credit Suisse served as lead financial advisor to Pixelle on the transaction

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Paper for recycling prices surge across Europe in March

Recovered paper

After prices for the bulk grades sorted mixed paper and board, supermarket corrugated paper and board and old corrugated containers (OCC) accelerated by up to £10-15 per tonne and €10 per tonne in the UK and continental Europe, respectively, in February, March brought hefty price increases for the entire paper for recycling (PfR) market.

  • Fueled by high demand from both domestic mills and exporters, prices for the bulk grades rose by approximately Euro 20/tonne or around £10-20/tonne, with some market insiders reporting even higher increases
  • Rising energy prices and the Russia/Ukraine crisis have not slowed PfR as expected by many
  • Industry player say Russia’s invasion of Ukraine has further exacerbated the already tight transport market
  • Deinking grades mirrored the development in the bulk grade sector and increased by approximately €20 per tonne

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Framing lumber price falls across species, many key prices posting triple-digit decreases

Wood products

With many of the drops akin to the extreme gains on the upside of the cycle, Fastmarket’s Random Lengths framing lumber composite price fell $126. The drop for the week nearly matched a $129 weekly increase back in mid-December. Month- and quarter-end selling pressure amplified the price cuts.

  • Buyers remain cautious amid still-historically high prices, rising mortgage interest rates, and general economy inflation
  • Structural panel prices plunged as producers struggled to generate orders amid risk-averse buyers
  • Canadian plywood distributors in Eastern Canada reported slower sales, while waiting on late deliveries.

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What to read next
The ball is in the sellers’ court, but time is on the buyers’ side in the Chinese pulp market
We track the recent volatility of mortgage rates
The construction of this type of housing continues to slow down
There may be further room in the containerboard market for price cuts, but demand could help stabilize prices
Unbleached kraft bag and sack paper prices stay unchanged this month
OCC import prices surges again but Asian buyers believe the price spike is unsustainable
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