N.A. Containerboard Markets Strengthening
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AbitibiBowater's decision to "pull the plug" on its attempted conversion at Coosa Pines, Ala., USA, is good news for containerboard and kraft paper producers, according to Wilde. The fact that this high-profile conversion, with its existing advantages, doesn't "pencil-out" is apt to ease concerns about incremental supply from other conversions.
Overall, containerboard markets are strengthening, Wilde points out. December box shipments were better than expected and the recent ISM figures suggest an impending uptick in box demand. Meanwhile, export prices appear to be stabilizing. Brokers are reporting pick-up in inquiries and some producers have reported a growth in backlogs. "At the moment, we'd characterize the domestic market as balanced."
However, Wilde adds, if operating rates remain in the low 90s through the winter lull and producers avoid inventory building, prospects of a successful price hike in Spring will increase. Most European producers announced a EUR 60/metric ton price increase on recycled containerboard, effective February 1, as well as hike on white-top liner.
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