International Paper announces price hikes, plunging the carton market into uncertainty
International Paper recently announced that it would raise the price of cartons and said that the price increase will take effect for orders on or after January 1, 2024. The move has triggered market uncertainty and some people have been shocked. This is also the rare price increase in the carton market in recent years.https://www.risedongsheng.com/
The announcement came 37 days after the company announced the closure of a large unbleached kraft paper factory in Orange, Texas, which is understood to be out of the market by the end of the year. The move raised questions about the reason for the price increase.
In the past five quarters, actual carton shipments in the United States have fallen by 6% -7% year-on-year. Meanwhile, the capacity utilization rate of US containerboard mills is only 85%, because they have experienced market-related downtime every month since September 2022. This shows that the market demand is weak and the carton industry is facing many challenges.
In response, some large conglomerates said their carton demand had picked up from the lows of Quarter 1 this year. They blamed the end of end users' destocking operations for the sharp drop in carton demand in the United States. However, actual carton shipments in the United States in the third quarter were only 1.6% higher than in Quarter 1, according to the Fiber Carton Association.
International Paper and some other carton makers said they announced price increases because they were currently unable to make a profit on the cost of capital. Ongoing inflation and rising labor costs have taken a toll on their bottom line. However, some carton buyers and market watchers have expressed doubts about raising prices amid weak demand.
The uncertainty in the carton market is also reflected in the price of cardboard. Some in the market believe that the announced price increase is too high, while others express confusion about the timing of the price increase. Carton buyers and manufacturers want to avoid further declines in carton prices, but the market remains full of uncertainty.https://www.risedongsheng.com/
Overall, the cardboard market is currently facing many challenges and uncertainties. Factors such as abundant supply, weak demand and rising costs have all affected the market. For the future trend, market observers expressed caution that the price of cardboard may continue to fluctuate.
The above is the report and analysis of International Paper's announced price increase and the uncertainty of the carton market. We will continue to monitor market trends and provide readers with the latest information in a timely manner.https://www.risedongsheng.com/