In the latest round of paper price increases, at least four uncoated recycled paperboard manufacturers have announced plans to raise prices. Meanwhile, according to a leading indicator, the overall price of containerboard and paperboard remained stable in March, but tariff factors appear to be impacting market demand.

Sinergi Corporation was the first to announce on March 10 that it would raise the price of uncoated recycled paperboard in the United States and Canada by $70 per ton starting April 10. The company also stated that from April 15, prices for paperboard products, including paper tubes, cores, cones, partitions, protective packaging, and other specialty products, would increase by at least 8%.

Following closely, Greif, Inc. announced on March 18 that starting April 21, the price of uncoated recycled paperboard will increase by $50 to $70 per short ton. Additionally, from April 28, the prices of paper tubes, cores, and protective packaging products will rise by at least 7.5%. Greif stated that the price hike for uncoated recycled paperboard is in response to increased manufacturing costs for their products, while the increase in tube and core product prices is primarily due to the rising cost of their key raw material—uncoated recycled paperboard.

According to Michael Roxland, a senior paper and packaging analyst at Truist Securities, citing data from Fastmarkets RISI, Cascades also joined the price hike trend on March 19, announcing a $70 per ton increase for uncoated recycled paperboard effective April 21. Roxland also noted that a privately held company named Ox Industries has announced plans to raise prices for uncoated recycled paperboard in April.

Regarding the price increase of uncoated recycled paperboard, Rockland stated that Cascades did not provide specific explanations. Greif explained that the price increase is due to rising manufacturing costs; Sonoco stated that it is due to "continuously rising input costs and tightening market supply and demand." Greif further explained that the price increase of products like paper tubes is primarily because uncoated recycled paperboard is the main raw material for manufacturing these products.

It is worth noting that Greif and Sonoco announced price increases for uncoated recycled paperboard last summer. This price increase is another round following earlier announcements by multiple manufacturers regarding price hikes for other grades of paper earlier this year. Previously, more than a dozen containerboard manufacturers announced price increases in January, typically ranging from $60 to $70 per ton for containerboard and $80 to $90 per ton for corrugated paper.

Last Friday, Fastmarkets RISI published the weekly issue of the "Pulp and Paper Weekly," which includes the monthly paper price information for March. According to a report sent to investors by Rockland on Sunday night, the prices of containerboard and cardboard remained stable. The monthly data from the January "Pulp and Paper Weekly" showed no price changes, while the February data only indicated partial increases: containerboard rose by $40 per ton, while cardboard prices remained unchanged. This situation is similar to last year's trend, when producers announced price increases at the beginning of 2024 but then tried to explain the reasons that the index did not fully reflect.

In last month's earnings call, executives from Sonoco and Greif did not delve deeply into tariff issues, although they indicated that they are conducting analyses to assess potential impacts and develop response plans. However, some analysts pointed out that demand in the paper sector has already been affected by tariffs, which may also impact paper pricing.

Lockersland explained that some Fastmarkets RISI contacts attributed the tariff-induced uncertainty to the weakness in demand, with some customers even canceling orders previously placed in March or April. He pointed out that the data suggests a mixed or declining trend in the demand for containerboard, with reported factory backlog inventory in February having reduced to four weeks or less by March.

However, as customers began to restock, demand for containerboard showed some signs of rebounding. "Due to clients placing orders before the tariffs took effect, some contacts mentioned their products were sold out," said Locksland. Other contacts anticipated that, driven by the tariffs, rising prices for food and consumer goods might once again push up the prices of paperboard and cartons, possibly around May or June.

Roxlan also explained that due to the impact of tariffs, the demand structure for corrugated paper has changed. In March, the demand for coated recycled board remained stable, but some contacts reported that demand slowed down in February and March after customers increased their inventory in January in anticipation of tariffs.

In February 2024, Sonoco announced the closure of its uncoated recycled paperboard mill in Sumner, Washington. In January, Greif announced the closure of several facilities, including an uncoated recycled paperboard mill in Fitchburg, Massachusetts. Last month, International Paper also announced the closure of several facilities, including the Red River Containerboard Mill in Coushatta, Louisiana.

Roxane states that if another major integrated producer announces further production cuts on top of this, the market supply could become tight, thereby supporting further price increases. Additionally, rising additional costs will also support price hikes.

Ryan Fox, a Bloomberg Intelligence analyst for the corrugated packaging market, mentioned in an interview in February regarding paper prices that the containerboard industry is facing an oversupply issue and anticipates more factory closures and capacity reductions in the coming months.

In Europe, Saica announced that starting from April 1, 2025, it will increase the price of recycled containerboard by €60 per ton in most regions across Europe. This move is primarily aimed at addressing the continuous rise in the cost of waste paper, the main raw material for recycled containerboard. The market widely views Saica's announcement as another action following Smurfit Kappa's earlier price hike. Smurfit Kappa had already raised the price of its brown recycled paper by €100 per ton effective February 1, 2025, with increases of €80 per ton in the German, French, and Polish markets.

Prior to this, from September 2024 to January 2025, the price of recycled paper in these regions had been reduced by 100 euros per ton. Typically, the price of kraft paperboard is determined by referencing the price of cardboard. Manufacturers including Smurfit Kappa and SCA have announced that they will increase the price of kraft paperboard starting March 2025. Analysts believe that the rise in boxboard prices, coupled with delays in new capacity, may indicate an improvement in the European boxboard market conditions.

Recently, Sege announced that starting from April 7, 2025, it will implement a price increase of 60 euros per ton for all grades of corrugated paper and paperboard in the European region. The company cited the rise in raw material costs and the ongoing pressure of high energy prices as the main reasons for this price adjustment. Adam Wood, Vice President of Sege's European Industrial Paper Products, stated that the continued tight supply of OCC, a major input for corrugated paper, has led to price increases in March, and future prices are expected to rise further.

He also pointed out that the continuous decrease in the export volume of old corrugated cardboard boxes in the European region has further exacerbated the domestic supply shortage, making the situation more complicated. At the same time, the previously expected drop in energy prices did not materialize because natural gas storage levels remain low, and it is expected that subsequent replenishment activities will prevent any potential cost relief that might have occurred in the summer.