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US unbleached packaging paper shipments were up by 14.5% and 206,000 tons through three quarters this year – as capacity was up by 114,000 tons, according to American Forest & Paper Association figures published this week.
The demand increase occurred as pricing for unbleached kraft paper was up across all the major grades, according to Fastmarkets’ PPI Pulp & Paper Week pricing survey. Levels were up for 50-lb unbleached extensible multiwall sack, 50-lb unbleached natural multiwall sack, and 30-lb bleached grocery bag paper. Pricing was also up for 50- to 70-lb unbleached grocery bag paper and 30-lb unbleached converting bag paper.
Unbleached bag and sack shipments were up 19.2% year-to-date at 951,000 tons, which is 60% of total unbleached packaging paper shipments, and converting and other shipments in unbleached packaging paper were up 6.3% totaling 342,000 tons. Multiwall paper shipments were up 12.3% year-to-date.
Market players say that packagers moving from plastic to paper and also especially Amazon’s work to eliminate plastic bubble wrap with paper were both reasons why shipments are on the increase.
Want to learn more about the state of the sustainable packaging market? Read our report on the three trends in the global sustainable packaging market, with insights from Fastmarkets director, European packaging and graphic paper, Alejandro Mata Lopez.
This all said, though, with the increased domestic capacity, the US market was taking fewer imports as a percentage of exports, compared with last year. Through three quarters this year, the US exported 301,000 tons of packaging paper and imported 380,900 tons, for an 80,000-ton difference. In 2023 through the first three quarters, the US imported 104,000 tons more than was exported.
Last year, ND Paper at its Biron mill in Wisconsin started up machine No. 26 for making both recycled unbleached packaging paper and recycled containerboard. That was the largest capacity startup in the US. Also, several months ago, White Birch Paper started up a recycled machine at its Stadacona, QC, mill, making both unbleached packaging and corrugating medium. The Stadacona startup was at the end of August/beginning of September.
Reports this week were that unbleached pricing for 30-lb lightweight converting bag paper increased $30/ton last month and 50- to 70-lb grocery bag paper increased by $10/ton. Contacts said that increased demand from Amazon was a key reason for the price increase, as only one producer in North America had announced a price increase. Another was out as well, according to reports this week. And one buyer reported that a large producer was not, as of now, charging the prices increases. That same company had a similar approach early this year.
At the same time, downstream converting plant activity was said to be good for bags and sacks, and for void fill and envelope mailers.
“Bag plants are busy right now. They have retail store demand, more so than any other time during the year. They have grocery stores (too),” said one supplier of unbleached packaging paper.
“I was surprised by the extent of [the demand increase for lightweight unbleached converting bag paper]. It’s been going on all month. There is tons of activity in that (30- and 40-lb) basis weight range, especially the 40-lb,” a contact with a mill said.
Another mill contact said the 30-lb demand was impressive.
The 30-lb typically goes for void fill and the 40-lb for the mailer envelopes such as for Amazon and others.
One of the mill contacts reported orders for December already, as of Oct. 17.
For both natural multiwall and extensible high-quality multiwall sack kraft paper used for cement bags, contacts told of consistent or better demand.
One buyer of extensible high-strength unbleached kraft paper said: “It’s strong there. There’s demand for (cement) bags. It’s difficult getting paper [fast].”
“Demand is getting better,” said a producer of the 50-lb natural multiwall sack unbleached paper, “with (holiday) baking and for the food industry.”
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