Dive Brief:
- International Paper, Georgia-Pacific and Packaging Corporation of America announced separate containerboard price increases to take effect June 1, according to a May 4 note to investors from Michael Roxland, senior paper and packaging analyst at Truist Securities.
- The announced amounts of the increases are $70 per ton for IP, $50 per ton for G-P and $50 per ton for PCA, according to the memo.
- Last week, Smurfit Westrock kicked off the second wave of containerboard price increase announcements in 2026 with its $50 per ton bump set to take effect June 1.
Dive Insight:
This wave of June hikes follows the major North American containerboard producers’ $70 per ton increases announced to take effect in March. Overall, their stated reasoning was to offset rising input costs.
Analysts largely had expected another round of increases, potentially mid-year. But negative factors during the first quarter, such as the war with Iran and shaky consumer confidence, prompted analysts to temper expectations for additonal near-term increases. Yet further turns in conditions that producers reported late in Q1 and early in Q2 reignited analysts’ confidence in another price hike at some point in 2026.
“Going forward, we believe producers may be able to implement further price increases, potentially in the late summer/early fall, supported by significant input cost inflation (freight, chemicals, delivered wood), in addition to improving demand,” Roxland said in an April 28 note to investors.
The American Forest & Paper Association released quarterly data on April 24 showing North American containerboard production during the first quarter of 2026 dropped 8% year over year, the largest such decrease in years. This stems from the industry collectively announcing a historic level of facility closures in 2025 that totaled nearly 10% of production capacity, with the last of those closures occurring during Q1 2026.
Executives broadly said during earnings calls over the last couple weeks that Q1 was a challenging quarter, including for rising input costs. But they also pointed to inklings of demand improvements in March and into April along with supply tightness.
Packaging Corporation of America reported strength in customer ordering patterns in Q1 and a year-over-year boost in corrugated shipments per day, with expectations for continued momentum through the year. But it also noted higher costs for raw materials and fuel. The company didn’t experience benefits from its previously announced $70 per ton containerboard price increase during the quarter, but expected to see some starting in Q2 and largely in Q3.
Smurfit Westrock announced its new $50 per ton hike just days before its April 30 earnings call. Executives reported challenges with demand in Q1 but signs of improvement, including reaching sold-out status for nearly every fiber grade in Q1. They noted higher input costs and anticipated impacts in future quarters from rising energy prices related to conflict in the Middle East. Regarding the new containerboard price increase, CEO Tony Smurfit said, “Frankly speaking, we and the industry need it, so therefore it’s going to happen.” Executives expected the first round of hikes to be fully realized by July and the second round by the end of September.
International Paper’s executives also discussed containerboard pricing during their Thursday earnings call. They expect $175 million in pricing benefits for the year, mostly reflected in results during the second half of 2026. When an analyst mentioned that Smurfit Westrock announced another increase to take effect in June, IP CEO Andy Silvernail responded: “We have not announced an increase yet” for June.
IP executives mentioned tightness with fiber supply. An analyst pushed back and suggested that the North American containerboard market so far hasn’t showed the anticipated tightness from the industry’s nearly 10% cuts, a factor that would support price hikes. But Silvernail reiterated that “the paper market in the U.S. is very tight” and the company was short on supply.
PCA executives, while discussing expectations that benefits from the previously announced price change could materialize in the second and third quarters, noted that Fastmarkets RISI only has recognized $50 of that $70 price increase so far this year. That net increase comes from a surprising $20 per ton drop in February, followed by a $40 per ton boost in March and a $30 per ton bump in April. PCA executives noted disappointment with the index not fully recognizing producers’ announced increases, reiterating the frustration they and other companies’ leadership have expressed about Fastmarkets RISI’s pricing in recent years.
Certain observers believe the new price increase marks a shift in the containerboard market. June will be a “major inflection point for linerboard pricing,” according to a LinkedIn post from Matt Reddington, vice president of packaging at Procure Analytics. He noted that these price hikes are one of the only ways for producers to recover costs from rising input expenses.
“For buyers, this likely marks the beginning of a sustained upward pricing cycle,” he said.
