Recycled Board Markets Solid

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Recycled boxboard markets look solid, Wilde continues. All major producers announced URB price increases for late-September/mid-October. Sonoco, Rock-Tenn, Ox Paperboard, Paperworks, Caraustar, and Graphic Packaging announced $35/ton increases, while Newark announced a $30/ton hike. Sonoco also announced a EUR 40/metric ton price increase in Europe, effective mid-October.

URB list prices were flat at $610-640/ton in September (+14.7% y/y), after two rounds of price increases of $30/ton in February and $40/ton in April (announced = $60/ton). In CRB, prices rose $5/ton to $845-$865/ton in September (+12.9% y/y). Since July, prices are up $30/ton (announced = $40/ton).

The current price increase in both grades is driven by somewhat improved consumer packaging demand, strong order backlogs, and higher operating rates, Wilde says. With domestic OCC costs up for the third month in a row (October = +$12/ton m/m to $147/ton), driven by strong Chinese demand and stock rebuilding. Producers' resolve to implement this hike may strengthen, he adds.