Linerboard Prices see a slight Surge; Cardboard Manufacturers Worry over their Consumer Hold

Linerboard prices have been witnessing a recent hike in the US, attributed primarily to heightened cost pressures from ongoing inflation, significantly impacting producers, particularly those specializing in recycled linerboard. Procurement Resource project the month-over-month price hike in linerboard prices from January 2024 to February 2024 to be standing at approximately 0.85%.

This adjustment in prices has posed a considerable challenge for box manufacturers in terms of transferring these cost increases to their customers. Major producers have announced significant box price hikes. However, smaller box manufacturers express concerns over the feasibility of imposing such steep increases on their customers, fearing the potential loss of business.

There's a split in how box makers are responding, with some fretting to pass on the full extent of the price hikes to their customers, considering smaller increases as more viable. Meanwhile, the anticipation of these adjustments has varied, with some expecting the increases sooner and others adjusting their strategies in response to the broader market acceptance of these changes.

The backdrop to these price dynamics includes both demand fluctuations and inventory management practices. Notably, there's been an increase in box demand, as indicated by year-over-year growth figures, suggesting a rebound in certain sectors like food. This demand recovery comes after a period of destocking, which had previously led to a significant reduction in box shipments.

The US export prices for kraft linerboard have remained stable despite a history of declines in the face of fluctuating global demand and supply imbalances. This stability contrasts with the domestic market's price increases, reflecting a complex interplay of factors influencing the packaging industry both in North America and globally.

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According to Procurement Resource, linerboard prices in the US have risen due to inflation and cost pressures, affecting especially recycled linerboard producers. This marks the first price hike in nearly two years, challenging box manufacturers to pass on costs to customers. With major producers announcing significant box price increases, smaller manufacturers worry about losing business if they follow suit. The situation reflects varying responses among box makers, demand fluctuations, and inventory strategies. Despite domestic price rises, US export prices for kraft linerboard remain stable, highlighting the global complexities of supply and demand in the packaging industry.