Future Expectations of Ross Containerboard Market

At present, due to the ongoing conflict between Russia and Ukraine, data show that the price of virgin paper in Russia remained stable in August, but producers have announced to customers in September that they plan to increase prices from October, and the upward trend is expected to continue into November. Since the price gap between recycled paper and unbleached kraft paper is less than 10%, some packaging manufacturers may consider switching between paper types.

A corrugated packaging manufacturer said: This shift may be particularly beneficial for packaging producers of products that require moisture-proof packaging, such as meat. However, their goal is not to take market share from recycled containerboard manufacturers, their current strategy is simply to increase prices and ensure profitability. According to reports, demand for white-faced kraft paper was also good in September, with demand coming from locally made beverage packaging as well as domestically produced disposable cups. In September, producers of virgin paper continued to face difficulties in export logistics. Due to the war between Russia and Ukraine, some trains were diverted, which may extend delivery times.

The Chinese market, which used to be very attractive for exports, is still slow, and some producers have reportedly had to shut down. In theory, containerboard under Russian customs code 4805, including kraft paper made from semi-chemical sulfate pulp, could be exported to Europe, but in addition to logistics complexities, the lack of Forest Stewardship Council certification makes it unattractive to European buyers. That could change if energy prices push European containerboard prices further.

Limited foreign travel opportunities continue to cause more people to remain within Russia, a development cited as another reason to help sustain consumer activity and containerboard demand. However, the Russian government announced its first partial military conscription since World War II on September 21, and many male residents are leaving the country. Contacts in the pulp and paper industry said it is too early to predict how the situation will develop and how the containerboard market will be affected. According to local media reports, industry may ask the government to allow employees to be exempted from military mobilization.

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