Dive Brief:
- North American containerboard prices in February fell $20 per ton from January, and the timing is “surprising,” according to a Feb. 22 note to investors from Michael Roxland, senior paper and packaging analyst at Truist Securities, citing Fastmarkets RISI’s monthly pricing information released Friday.
- This is the first such dip since November 2023, Roxland said, noting the new declines for kraft liner, corrugating medium and recycled linerboard.
- This jeopardizes recognition of the $70 per ton price increases that several producers announced would take effect March 1, after a pause on increases since late 2024, say multiple industry analysts.
Dive Insight:
Analysts generally are calling the February containerboard price drop unexpected. Jefferies said in a Sunday note to investors that its contacts were “shocked with the timing,” similar to BofA Securities’ Monday morning note saying the decline came “somewhat surprisingly.”
“Although we'd previously highlighted some downside risks if demand didn't improve, we had thought market tone was gradually getting better,” wrote BofA Securities analyst George Staphos in the note. “[G]iven the highly integrated nature of the larger producers, this move alone won’t crush forecasts but it nonetheless is a negative.”
The price drop drove declines in several major packaging companies’ stock prices in pre-market trading Monday, Investing.com noted, citing information from Detlef Winckelmann, JPMorgan Securities research analyst. He pointed to reasons including sluggish demand, some discounting by integrated producers and increased imports of containerboard from Europe.
“The development marks a negative turn for US packaging companies that rely on containerboard pricing as a key revenue driver. The price drop suggests weakening market conditions in the domestic packaging sector,” says Investing.com.
A Monday morning Barron’s article also noted the packaging company stock market dips. It cited a Monday note to investors from Stifel analysts Lars Kjellberg and Massimiliano Pilato, which says, “We did not see this coming and the price move is likely to weigh on near-term share price performance.”
The week prior to Fastmarkets RISI’s information release, BofA analysts released a box report in which they maintained existing forecasts for the next containerboard price hike to occur in Q1 2026, saying “[c]apacity closures continue to drive an improved outlook.”
Other analysts also had noted improved industry supply and demand dynamics in recent weeks, after a series of closures in 2025 resulted in a historic containerboard production capacity pullback of nearly 10% in North America.
“We find the timing of this decline surprising,” Roxland said, citing the “sharp respondent downturn” from January’s survey and the “positive commentary surrounding large integrateds’ systems.”
He said some of the downward movement likely could be attributed to the widespread January winter storm tamping down demand, a factor that numerous companies’ executives — including at Graphic Packaging International, International Paper, Packaging Corporation of America and Smurfit Westrock — brought up during recent earnings calls. But several producers reported slight demand improvements in January, further causing analysts’ surprise at the February price drop.
Packaging Corporation of America in January became the first major to announce a price increase for 2026, with International Paper following just days later. Cascades made an announcement in early February, and Smurfit Westrock’s occurred on Feb. 10.
“[T]here is now increased risk to the industry’s $70/ton March price increase,” according to Roxland.
Other analysts echoed that sentiment. “This will make it harder for the industry to implement the cboard price increase, but we still see a path for partial realization this spring,” the Jefferies team noted.
Like Roxland, Jefferies analysts mentioned a similar situation a couple years ago when the industry “pushed through a partial price increase” of $40 per ton in February 2024, instead of the desired $70 per ton, after Fastmarkets RISI showed a $20 per ton price decrease in November 2023.
Fastmarkets RISI’s data only covers the open market, which Truist and Jefferies explained is a small portion of the overall containerboard market — generally estimated at less than 10%. Considering this small percentage, “it’s always been odd the industry relied on RISI, esp given the high vertical integration of the large players,” Jefferies analysts noted. “The $20/ ton cut isn't typically large enough to trigger box prices lower” due to the small percentage of contracts tied to the index.
The index also ruffled producers’ feathers and caused some controversy in 2024. At that time, Fastmarkets RISI’s index only partially recognized producers’ multiple attempts to raise prices, prompting executives at several of the majors to note frustration and a desire to move away from using it as a trigger written into customer contracts.
GPI was the first to formalize such a move. After announcing it would eliminate third-party indexes starting in Q1 2025, executives described throughout last year the company’s work to move customers onto its own pricing index. PCA executives also described price index frustration during a January 2025 earnings call, along with their intention to move away from that index as fast as possible.
Analysts generally anticipate that despite the new price decrease, the containerboard market will still recognize a partial price increase this spring — “but it now could take longer to implement,” according to Jefferies. Factors include seasonal demand upticks and the industry fully realizing the last of the capacity closures announced in 2025. BofA analysts stated they “continue to expect a $40/ton increase in March.”
Tariffs are another factor that could affect the timing of any price hike recognition. Namely, there could be fallout from Friday’s U.S. Supreme Court decision rendering most of President Donald Trump’s tariffs unconstitutional, and the president’s subsequent declaration that he would implement 15% global tariffs.
“Continued market uncertainty, including a new potential wave of tariffs, may push this into Q2,” according to the Stifel analysts.
Boxboard pricing for all grades, including coated and uncoated recycled board, coated unbleached kraft and solid bleached sulfate, remained unchanged from January.
