Boxboard Prices Jump

Rising energy and recovered paper costs are often cited by boxboard mills as reasons for needing to increase their prices. Energy costs have been rising for a while now, impacting every consumer to one degree or another. So this reason rings hollow nowadays. Recovered paper prices (old corrugated containers in particular) rose substantially earlier this year, reaching $150 per ton by late February. But now these prices have softened, with OCC selling for about $100 per ton coast to coast. So while this reason for a need to increase board prices is often justified, the cyclical nature of recovered paper prices makes you wonder if board makers will now reduce prices.

That’s not likely to happen anytime soon simply because the number of mills making such key boxboard grades as clay coated recycled is shrinking. Last year Canada’s Cascades purchased (from Caraustar) and then closed the Sprague Paperboard mill in Connecticut, a major producer of this grade. Simply put, independent folding carton converters are seeing their board supplier base contract.

“Lead times are out of this world,” says an executive for an independent carton converter in the North Central. “It’s four weeks at best but can reach six to 10 weeks.”