Containerboard production in the U.S. continued a yearlong decline in the second quarter, but the rate of decrease slowed. The American Forest & Paper Association’s quarterly data release overall paints a healthier picture than the containerboard industry has experienced since at least early 2025.
While AF&PA’s data showed containerboard production declined more than 2% year over year in Q2, that’s a sequential improvement from the 8% year over year decline in Q1. That dip was the industry’s steepest in years. Production during the first half of 2026 was down 5% compared with the same period in 2025.
The 2026 production decreases come after industry closure announcements in 2025 that add up to a nearly 10% loss of production capacity in North America. The last of those closures occurred early this year.
The association noted a tie between the production decline and reduced exports, which were down approximately 19% in Q2 compared with the same time last year. During a June conference, Packaging Corporation of America CEO Mark Kowlzan said the company had deferred some of its Q2 containerboard export sales to rebuild its United States box plant inventory in the second half of the year.
Q2 2026 showed slowest rate of containerboard production decline in a year
On the positive side, AF&PA showed the industry’s overall operating rate increased to nearly 95% in Q2, up from approximately 93% in Q1. Operating rates for three of the four major grades increased sequentially, with unbleached kraft linerboard leading at a 95.7% rate. Recycled medium was the only grade not to increase, showing an operating rate of 93.5%, down 0.1 points.
AF&PA reported in Q1 that operating rates had been essentially flat year over year, decreasing 0.1% to 91.6%. Early this year, industry observers had predicted that the rash of facility closures would boost operating rates.
At the end of June, mill inventories were at their lowest levels in 15 months, according to AF&PA. Demand increased slightly, growing approximately 1% year over year. Actual box shipments also increased approximately 0.9% year over year, which aligns with what some companies reported during recent earnings calls, according to an Aug. 2 memo to investors from Michael Roxland, senior paper and packaging analyst at Truist Securities.
Packaging Corporation of America executives said during their Q2 earnings call on July 23 that the containerboard market is tight and company shipments were up 4.1% year over year in the legacy business, which excludes the acquisition of Greif’s containerboard business in September 2025. Similarly, International Paper executives said during their July 30 earnings call that per-day box volumes increased 1.7% year over year in Q2. However, demand was “softer than we had expected,” said CEO Andy Silvernail.
AF&PA also released Q2 data for boxboard, with the production aggregate for all grades showing a 2% year-over-year increase.
But the boxboard operating rate came in at 88.8%, down 0.6 points year over year. The operating rate for both unbleached kraft and coated recycled paperboard increased 2.6 points year over year to 92.6%. The operating rate for uncoated recycled paperboard was 97.2%, up 3.6 points from the same time last year.
Solid bleached sulfate showed an operating rate of 82.1% in Q2, Roxland said, which is up from 81% in Q1 but down from 87.7% in Q2 2025.
SBS has been in an oversupply and producers have taken actions in recent months to rationalize production capacity. In Q2, Clearwater Paper completed restructuring activities at an SBS mill in Cypress Bend, Arkansas, where it halved production, according to executives on the company’s July 28 earnings call. And in February, Smurfit Westrock announced that it would permanently close down one of the machines at its SBS mill in La Tuque, Quebec.
