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The European paper packaging market has seen a quiet summer period, with demand continuing to be quiet and prices largely remaining stable across the different grades. Many contacts also reported planned mill downtime or lower operating rates playing their part in managing capacity and keeping the prices steady.
With supply from European mills relatively tight, contacts reported that brown kraftliner prices were stable in almost all the markets surveyed over August, despite lackluster demand.
The exception was in Italy, where cheaper American tonnage is available and popular. Contacts reported that European suppliers were obliged to follow American prices down there by another Euro 20/tonne, after a similar drop in July. The declines were not as ubiquitously reported as they were last month, though.
Although contacts do not expect big improvements in terms of brown kraftliner demand in September, many expect stable pricing due to a great deal of mill downtime planned for the month.
Meanwhile, white-top kraftliner prices were stable in all the markets surveyed over August, but many contacts outside of the UK confirmed semi-chemical fluting price declines of Euro 20/tonne.
Recycled containerboard (RCCM) prices were stable across the markets surveyed in August, despite quiet demand. Contacts attributed the low sales to seasonal as well as structural factors, but many seemed glum about the prospects for much improvement in demand over the rest of 2023.
August is the fifth month of unchanged RCCM pricing in the UK, Germany, France and Spain. Italian RCCM prices were also steady this month, with fewer reports of cheaper testliner and fluting offers from central European mills than earlier in Q3.
Contacts reported low operating rates or shuts at RCCM mills, especially in the south of Europe, and increased competition for market share in eastern Europe.
Meanwhile, outside of Italy, white-top testliner (WTT) price drops that some contacts reported in July were confirmed elsewhere for the beginning of August. Other contacts reported steady WTT pricing over the period.
The summer was a sleepy one on the folding boxboard (FBB) front as one producer described it to be frustratingly quiet and others agreed that this August was even more dead than normal.
While some producers continued to exhibit a bullish stance in the face of this slimmer than usual demand, refusing to make adjustments to prices, other players reported that price reductions continued in a somewhat haphazard fashion. Overall, this tended to result in reductions of some Euro 20-30/tonne.
Producers continued to take selective downtime at mills in order to manage capacity as they attempted to create a bulwark against further price drops ahead of the final months of the year.
White-lined chipboard (WLC) prices continued their decline during a summer which saw little action. However, some producers had reportedly found a bottom for pricing, for the time being, ahead of the beginning of the third quarter, while others continued to report price erosion. Depending on the geography, this resulted in reductions of Euro 10-30/tonne. Board from eastern Europe and Turkey continued to change hands at much lower prices than those set by major producers.
As with FBB, downtime at mills was still reportedly commonplace for producers who described a quieter than usual summer. The Lazio, Italy, government’s seizure of the water treatment plant at RDM Group’s Villa Santa Lucia mill, forcing downtime at the facility, reduced volume as well. However, neither of these developments were extreme enough to have a positive impact on prices ahead of Q4. RDM Group did not comment on whether there was any update at the mill or when the company expected production to restart.
This article was first published in our PPI Europe newsletter. Find out how you can access the latest market news and price developments in Europe directly from your inbox by speaking to our team.
Learn how to monitor packaging prices using cost and price indices and understand the underlying cost drivers, from material cost to labor, energy and more. Examples include cartonboard, liquid container and paper bag.