Containerboard Industry Perspective
1st Quarter 2012
Price Hikes on the Horizon?
By Jesse Marzouk
Looking ahead to the second quarter, producers appear
to be back on the offensive. In
an attempt to move corrugated
medium prices from their 24-month spot, Longview Fibre and
Rock-Tenn announced a price
hike of $30 on corrugated medium prices on the West Coast
beginning in April. The increase
would bring list prices in line
with linerboard prices at $660
per ton. Currently, no price
hikes have been announced on
linerboard on the West Coast or
linerboard or corrugated medium in the Eastern U.S.
North
American
prices for
containerboard and
paperboard
remained
flat in the
first quarter
of 2012.
U.S. West
Coast prices for unbleached kraft linerboard remained steady at $660
per ton, and corrugated medium
held at $630 per ton. These
prices have remained unchanged for 24 straight months,
a quite remarkable occurrence.
Both coated and uncoated paperboard held steady in Q1,
with clay coated news at $920
per ton and bending chip uncoated paperboard maintaining
its $670 per ton price point.
Heading into the first quarter, there was fear in the containerboard market that prices in
the U.S. would come under pressure as export prices experienced declines that came on
the back of weaker-than-expected demand in Europe
and Asia. A significant drop in
recycled fiber prices also began
to undermine North American
containerboard prices as recycled producers were given more
breathing room. U.S. producers
were able to maintain prices in
the first quarter, however, as a
rebound in demand worldwide
and a stabilization of recycled
fiber prices supported containerboard market prices in North
America.
Looking ahead to the second quarter, producers appear
to be back on the offensive. In
an attempt to move corrugated
medium prices from their 24-month spot, Longview Fibre and
Rock-Tenn announced a price
hike of $30 on corrugated medium prices on the West Coast
beginning in April. The increase
would bring list prices in line
with linerboard prices at $660
per ton. Currently, no price
hikes have been announced on
linerboard on the West Coast or
linerboard or corrugated medium in the Eastern U.S
Jesse Marzouk is a vice president and forestry products specialist. He has
appraised numerous U.S. and Canadian pulp, paper, and lumber-related companies
involved in manufacturing and distribution. Jesse received his MBA in finance from
Kellogg School of Management at Northwestern University, and has a degree in
finance and accounting from Indiana University.