Corrugated Box Shipments Tumble - Packaging-Online

On an average week basis, industry shipments of corrugated products fell 6 percent last month, the Fibre Box Association (FBA) reports. Last month had two more shipping days (21) than July 2006. On an actual basis shipment rose 3.9 percent during this period.

July has never been known as a robust month for box makers. So these numbers aren't surprising. However, the year to date shipment numbers don't paint a brighter picture. On an average week basis shipments fell 2.4 percent while on an actual basis they fell 1 percent. The first seven months of this year had 148 shipping days, versus 146 in 2006.

Containerboard consumption (measured in thousands of tons) rose 4.2 percent last month while year to date it was flat.

Containerboard inventory at corrugator plants rose 2.6 percent between the end of June and the end of July while weeks of supply increased 6.2 percent, going from 3.2 to 3.4, the FBA says.

Containerboard production was up 1.2 percent versus July 2006, as containerboard produced for export was flat from June 2007 levels (which are up 18.8 percent to date). With slightly more capacity in the system, year-over-year operating rates still rose from 98.1 percent in July 2006 to 100 percent last month.

"July box shipments were a continuation of year to date trends," says Edings Thibault, paper industry analyst for Morgan Stanley, New York City. "Operating rates remain high, inventories remain low, and box demand remains lackluster. The data offers little incremental support for the proposed August containerboard price increase. But with costs rising, we think the odds of the board price increase succeeding are better than even.

"The success of this increase is far from certain. But our industry sources are telling us that there is a good chance that some or all of the increase will go through."OBM

Callout: "The data offers little incremental support for the proposed August containerboard price increase."—E. Thibault, Morgan Stanley