As Inventories Mount, Containerboard Prices Fall

 

According to a report by Wall Street Daily, Baltimore, Md., USA, given stronger-than-expected December box shipments and the increased demand for packaging enhanced by online shopping, one might think that containerboard prices would be stable or rising. But this hasn’t been the case according to this past week's report. 

Currently, there’s too much supply relative to demand – and supply is increasing, too. This is what happened to crude oil, the report explains, and other commodities as well. And since it takes energy to make most commodities, lower energy prices naturally beget lower commodity prices.

According to Pulp & Paper Week, cited by the report, prices for North American containerboard are estimated to fall as much as $20 per ton from December levels.

The Daily reports that the most recent data from Pulp & Paper Week revealed that global pulp deliveries increased by 9.3% to 4.29 million metric tons in December, up from 3.92 million metric tons in November. Shipments were also 5.6% higher than the same period a year ago, due to increased deliveries of bleached softwood kraft pulp and bleached hardwood kraft pulp.

Meanwhile, global producer inventories stood at 35 days of supply in December.

The strength of the U.S. dollar has also been a major hit to the industry according to Wall Street Daily, weakening the competitiveness of exports and hurting demand for packaging materials in the U.S.