US packaging paper demand dropped by 2% while unbleached capacity rose by 9% in 2023

The pace of demand for paper packaging in the US slowed in 2023 due to end-user destocking and prices for unbleached paper dropped by $40-50 compared to 2022

US packaging paper demand declined 2% in 2023 compared with 2022, while unbleached packaging paper capacity increased by 9% to 2.29 million tons, the American Forest & Paper Association (AF&PA) reported.

The unbleached capacity last year increased by 170,600 tons. Much of that increase was from the startup of a converted print paper machine by ND Paper at its Biron mill in Wisconsin. ND at Biron is now making unbleached lightweight 30-lb and heavyweight 50-lb packaging paper, market contacts said in the last several weeks.

There also have been other smaller capacity add-ons noted in the marketplace, including Pratt Industries making some bag paper, and claims that some recycled containerboard startup capacity last year made some unbleached packaging paper.

US unbleached and kraft paper demand reached 2.70 million tons in 2023, led by a 0.9% increase in unbleached packaging paper shipments of 1.936 million tons. US kraft paper imports dropped 9.4% on a year-over-year basis to 497,000 tons and exports declined 7.9% to 357,000 tons, the AF&PA reported. Packaging paper demand for unbleached and bleached shipments was 2.76 million tons in 2022.

The 2% decline to the 2.70 million tons occurred as US actual box shipments were expected to fall by 4-5% year-over-year, indicative of the downward demand pace overall in US packaging during a more than one-year period of destocking by packaging end users.

For unbleached packaging and specialty packaging paper, full-year 2023 bag and sack paper shipments were up 5.1% to 1.1 million tons, and converting and other shipments were up 7.8% at 433,500 tons. The converting/other shipments grew from increased e-commerce mailer envelope business for last-mile deliveries to consumers, contacts said. These mailers are made with unbleached kraft paper.

Contacts reported overall lower demand in the first quarter and then slowly growing demand especially during the holiday season, according to P&PW research. December 2023 unbleached packaging paper shipments increased 1.4% compared with unbleached shipments in December 2022.

Prices off by $40-50

Pricing for unbleached kraft paper dropped by $40/ton and $50/ton in 2023 compared with 2022 on unbleached grades surveyed by Pulp & Papaer Week. Prices for bleached kraft paper were unchanged in 2023 vs 2022 although some weakness was reported near yearend.

US unbleached kraft paper producers believe improved demand going forward will come from single-use plastic packaging being reduced. Also, some expect benefit from US Dept of Commerce preliminary duties on imported paper bags. The antidumping and countervailing duties were recently levied on imports from various countries around the world. Final duties are pending.

Along with ND Paper at Biron in the US, added unbleached kraft paper capacity started up last year in Canada by GreenFirst Forest Products at its Kapuskasing, ON, mill and by Paper Excellence at its Crofton, BC, paper mill. Contacts said Paper Excellence at Crofton sold some unbleached packaging paper until July, before the paper mill was idled.

Crofton paper operations indefinitely idled

On Jan. 25, Paper Excellence announced the indefinite curtailment of paper operations at the Crofton mill on Vancouver Island, BC.

“Market dynamics, inflationary pressures on raw materials, energy cost opportunities, and a lack of local domestic fiber supply resulted in substantial increases in operating costs,” Paper Excellence said in its release. “These pressures have materially impacted the current and future financial viability of the paper operation.”

This indefinite curtailment of the mill affects approximately 75 employees, the company said.

Also in Canada, White Birch said last year that it planned a conversion in August this year of one of its paper machines in Quebec City, QC, to what contacts say will be bleached packaging paper.

In 2023, from Canada, the US imported 113,000 tons of unbleached packaging paper and 121,000 tons of bleached packaging paper. Unbleached imports from Canada were down 2.2% and bleached imports were down 6.6%, year-over-year. Two of North America’s largest kraft paper producers are Canadian Kraft and Canfor.

Want to know what’s behind your packaging price? 

Our cutting-edge index builder tool can provide valuable insights into how market volatility affects packaging costs, allowing you to make informed decisions and negotiate better deals. Learn more.

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
Fastmarkets adjusted its assessments for the stainless steel scrap 430 bundles, solids, consumer buying price, delivered mill Pittsburgh and the stainless steel scrap 409 bundles, solids, consumer buying price, delivered mill Pittsburgh effective Monday February 12.
Fastmarkets welcomes your feedback on the following action: Prices for Region 4 logs in Log Lines will be discontinued, as those prices are generated by a third party and we no longer use third party information. Region 4, or the “Inland Region” includes: You can find the current methodology for Log Lines here. To provide feedback […]
Random Lengths is inviting feedback from the industry on pricing methodologies for Random Lengths and Random Lengths International as part of its annual methodology review process.
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.