North American Containerboard Price Hikes in September Will Raise Packaging Costs
September containerboard price hikes of up to $140 per ton will quickly translate into more expensive corrugated packaging.
Linerboard Supply
Packaging Material
Flat paperboard availability for the outer surfaces of corrugated boxes is a critical factor for the packaging industry. In the context of manufacturing, linerboard supply refers to the total volume of this material produced by paper mills and available for sale to box makers. It is the primary component of the containers that carry most consumer goods.
This material is typically made from virgin wood fibers or recycled paper.
Production Capacity
Paper mills operate massive machines that produce wide rolls of paper around the clock. The total linerboard supply depends on the operating rates of these mills and any planned maintenance shutdowns. When new mills are built, the market may experience a period of oversupply until demand catches up.
Conversely, if a major mill closes, the sudden drop in volume can lead to shortages and higher prices for box manufacturers.
Demand Fluctuation
Growth in e commerce has increased the demand for corrugated boxes and the materials used to make them. During periods of high retail activity, linerboard supply can become tight, forcing box plants to extend their lead times. Prices for the material often follow the cost of energy and raw fiber.
Recycled fiber prices are particularly volatile and can affect the cost of the finished board. Large companies often sign multi year contracts to ensure they have a guaranteed volume of board for their operations. Recent shifts toward plastic free packaging have further increased the reliance on paper based solutions across the logistics sector.