U.S. Paperboard Markets Soft, under Pressure
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July U.S. coated recycled board (CRB) estimated prices were flat m/m at $890-$910/ton after a $20/ton decline in June, Mark Wilde of Deutsche Bank says. Reports, he adds, suggest producers are offering spot deals. The two key issues are soft demand and falling OCC (old corrugated container prices)—see Containerboard/Packaging section below. Trade reports suggest most CRB producers are taking downtime to maintain demand/supply balance and prevent prices from slipping. URB (uncoated recycled board) remains mixed. "Demand is OK, aided by last year's supply reductions. However, falling OCC could pressure URB prices. July prices were flat at $655-$685/ton," Wilde notes.
Solid bleached sulfate (SBS) board demand is soft and prices are under pressure, according to Wilde, and producers are taking downtime to keep the demand/supply in balance. July estimated prices were flat at $1,135/ton. Trade reports, he points out, suggest that order backlogs have declined and producers are offering spot deals. The $50-$60/ton hike on cupstock and plate stock hike in late-May/June does not appear to have gained much traction. "
Better than SBS and recycled grades. July coated unbleached kraft board estimated prices were flat at $1,000-$1,060/ton, Wilde reports. Demand is relatively stable, although not as strong as last year. Producers have done a good job of keeping demand/supply in balance, he says, adding that a $40/ton February price hike failed to gain traction.
A key issue for all boxboard grades is the prospective fall-out from a surge in Chinese capacity, Wilde continues. "With fiber costs down and Chinese demand having slowed, we could see a jump in Chinese exports.
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