Unbleached kraft paper prices dropped again this month, with levels down $10/ton for 30-lb lightweight grocery bag paper and down by $10/ton for 50-lb unbleached natural multiwall sack kraft paper.
Prices were unchanged this month for 50-lb unbleached extensible high performance multiwall sack kraft paper used mainly for cement bags, and 30-lb lightweight bleached kraft paper for grocers and fast-food bags.
Contacts said that one of the large unbleached kraft paper producers had, with its linerboard production reduced by downtime and reduced orders, moved swing linerboard/unbleached kraft paper output over to kraft paper. This caused extra supply while US unbleached shipments at the same time decline by double digits year-over-year in November and December.
“They’re now putting more into unbleached kraft paper. That has put pressure on the market,” one supplier contact said, of swing capacity from containerboard now in the unbleached kraft paper market.
Another producer added: “You also will likely hear about linerboard swing machines putting tons back into the KP market. Regardless, we have seen some pressure but not made any significant adjustments.”
One contact also told of yearend “holidays specials” that affected some unbleached kraft lightweight 30-lb and 50-lb natural prices.
Contacts told of “more available” unbleached kraft paper in the market than a year ago and in late 2021. North American tons were much more available for export now, a contact said.
Since August, the lightweight 30-lb unbleached kraft paper for grocery bags is down by $40/ton, and pricing for 50-lb natural multiwall bag and sack paper is down by $30/ton. Market prices for 30-lb were reported at $900-930 – and with some levels as low as $870/ton, according to the Fastmarkets’ PPI Pulp & Paper Week pricing survey.
Even with the declines on the lightweight grade and the 50-lb natural, the lightweight 30-lb bag paper is up by $230/ton since levels started their price run-up at yearend 2020 and the natural 50-lb grade price, even with this month’s $10/ton decline, is by $240/ton since yearend 2020, according to P&PW’s price survey.
The lightweight 30-lb price as of this month is up by nearly 35% from two years ago.
Buyers in December called out what they expected to be a $50/ton reduction in unbleached kraft paper prices for the lightweight and natural multiwall grades, and possibly even the extensible high-strength grade.
One buyer said deals were available and “there are deals at greater levels available” than the combined $30/ton P&PW decline in December 2022 and January 2023 for the lightweight 30-lb grade.
“Mills are starving to keep their assets running and happy to offer additional cost reductions,” the contact said. “Market demand has softened but there is ample supply available.”
Another buyer noted the same for unbleached kraft paper bags and sacks that go into the food service packaging channel.
And another said that some sack bag paper demand was “in flux due to import bags.”
One converter told of mixed prices for this month on lightweight 30-lb recycled bag paper.
“It really depends on the mill and their current capacity but, for the most part, it is continuing to come down,” he said, of the 30-lb unbleached kraft bag paper.
“I have seen $50 at some mills and as little as $20” at others, the converter said late this week.
As with November, December US packaging paper and specialty packaging paper shipments declined. The drop for unbleached grades was 11.5% for December 2022, when compared with December 2021 shipments, according to statistics from the American Forest &Paper Association (AF&PA).
Year-to-date unbleached packaging paper and specialty packaging paper shipments declined 2.4% and totaled 1.999 million tons, when compared with full year 2021 shipments, the AF&PA reported. Bag and sack shipments for 2022 dropped 3.4% and multiwall sack shipments dropped 1.5%, compared with 2021 shipments.
This article was first published in PPI Pulp & Paper Week, the industry’s most trusted pulp and paper market news and prices for North America. Speak to our team to find out more and subscribe to our newsletters.
