Paper
Paper
Price movements (monthly)
US Kraftliner
Month-on-month Change
Year-on-year Change
US Testliner
Month-on-month Change
Year-on-year Change
US Cartonboard FBB Kraft (CUK)
Month-on-month Change
Year-on-year Change
US Cartonboard SBB (SBS)
Month-on-month Change
Year-on-year Change
- Mill closures have removed roughly 6% of containerboard capacity from the market since the beginning of this year.
- One market participant noted uncertainty about downstream demand from both domestic and export customers as the source for downward pricing pressure.
- Sources indicated that demand for kraftliner has softened due to increasing preferences for recycled materials.
- Testliner prices remained flat m-o-m with continued containerboard capacity adjustments helping to maintain current pricing levels.
- Pricing for old corrugated containers (OCC), a key input for testliner, has gone up only 0.3% from June to July, which indicates that demand has stabilized, according to sources.
- Cartonboard pricing began to diverge in July, with coated unbleached kraft (CUK) boxboard jumping 3.0% m-o-m while solid bleached board (SBB) remained flat for the month.
- Price increases by Graphic Packaging were responsible for the upward movement in pricing in July, according to sources.
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Price drivers (EU and US)
→ Raw Materials
Prices for corrugated waste, a primary input for recycled paper, were relatively flat at 0.3% m-o-m, but down 3.7% y-o-y for July. US prices for old corrugated containers (OCC) have been relatively stable since the new year, with demand holding pricing steady for the first half of the year despite some concerns about oversupply.
↓ Natural Gas
US gas prices decreased 9.6% m-o-m in June to $3.31/10Therm, representing a 49.9% y-o-y climb. LNG exports and industrial consumption both slowed during the month.
Underground storage of natural gas remains 6.7% above the historic 5-year average as producers continued to store more gas ahead of the winter season.
↑ Logistics
In June (latest data available), the North American linehaul trucking index ticked up 0.4% m-o-m and was up 1.9% y-o-y.
Overall freight shipment volume was down 2.4% y-o-y and down 0.2% m-o-m in June.
↓ Labor Market
Hourly earnings growth for employees in manufacturing decreased by 0.1% m-o-m and 3.5% y-o-y in June. The unemployment rate for the US manufacturing sector jumped from May to June from 3.6% to 4.2%.
Wage growth again dipped into negative territory, which is typically a sign of a slowdown in production for the manufacturing sector.
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Price forecast (EU and US)
We have seen the price of US Kraftliner increase since it reached a significant low in the first quarter of 2024. The longer-term uptrend is expected to persist as we move into the second half of 2025. A continued increase is partially driven by the usual seasonal upward pressure throughout most of the second half of the year, but with kraftliner prices being highly cost-driven, increasing production costs are likely to pave the way for further price increases. Krafliner prices have pushed higher in some quite volatile moves throughout the increase, but the analysis indicates that the upside risk is getting limited, and this could weaken volatility moving ahead.
Similar to the US Kraftliner market, the EU Testliner market has also been experiencing a price recovery since its low point in early 2024. However, the recovery for EU Testliner has been less pronounced compared to US Kraftliner, with price movements showing more variability in both upward and downward directions. Despite the current upward trend in EU Testliner prices, it is anticipated to weaken, although prices are expected to stay elevated through the summer. This seasonal pattern helps maintain elevated prices during the summer months, but with testliner priced high based on a combined fundamental view the potential for further significant increases seems limited looking ahead.
A remark has to be made with respect to tariffs, as changes herein can fundamentally change the market dynamics and trade flows, which will affect prices.
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Market sentiment (for the month ahead)
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