Top forest products stories this week, March 7 2022

Containerboard producers implement 4th price hike, pulp imports prices surge in China and Mexican OCC market remains steady

Packaging producers lined up with 4th NA liner price hike; CEO says IP is recovering from 2021 mill problems

Packaging

This week, North America’s largest containerboard producers began implementing a fourth linerboard price increase in 17 months. Leaders from the three largest US integrated companies spoke of good demand, and continuing high supply-chain costs and difficulties, especially for transportation.

  • Contacts say the $70 per ton increase was at least partly a result of cost inflation
  • Containerboard executives site freight in limiting the volume and speed that boxes could move to the marketplace
  • IP CEO Mark Sutton explains the Artic Freeze in the US Southwest caused $200 billion in damages to four mills
  • Costco reported sales for the first 24 weeks of this year increased 16.4%, to $100.35 billion, from $86.23 billion last year

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Pulp import prices surge $30-90/tonne in China, spurred by shortages and futures

Pulp

Supply-side disruptions, logistics bottlenecks and climbing resale prices resulting from shortages in customers’ stocks in China have driven up levels for pulp imports across the board there. Prices for all grades, including BSK, unbleached softwood kraft (USK), bleached hardwood kraft (BHK) and bleached chemi-thermomechanical (BCTMP), have surged $30-90/tonne over the past two weeks in the Chinese market.

  • West Fraser has managed to implement hikes of as much as $110/tonne for its softwood and hardwood BCTMP for March orders
  • Large P&B mills have continued to get contract volumes every month, not knowing how long the logistics problem will last
  • BSK futures levels for the most traded May contract (sp 2205) settled at RMB 6,892/tonne on Thursday, spiking RMB 522/tonne from a fortnight ago

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Mexican imported and domestic OCC prices remain unchanged in March; demand is positive

Recovered paper

Prices for both domestic and imported old corrugated containers (OCC) remained stable in March compared with February, sources told Fastmarkets. Demand for bulk grades was steady at the start of March, and pricing for imported OCC was unchanged month on month at $180 per ton, although that was still 63.6% higher than a year ago.

  • Prices for the main regions of Monterrey and Mexico City stood at 4,400-5,000 pesos per tonne, up 59.3% year over year.
  • US Department of Commerce data shows that recovered paper shipments to Mexico skyrocketed by 65.94% in 2021, reaching 2.25 million tonnes
  • Pricing for sorted office paper (SOP) increased by $20 per ton to $240-250 per ton, and sorted white ledger (SWL) also increased by $20 per ton to $315 per ton

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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.

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