All five of the top US containerboard and corrugated producers have announced a January price increase of $60-70 per ton for linerboard, which we expect to find substantial traction despite market conditions that remained soft through the third quarter of 2024.
With overall demand still weak and operating rates still tepid, we view the announced price increase as driven primarily by producers’ focus on margin improvement —similar to the cost-driven price rises that occurred in 2024 but without the upward pressure from old corrugated container (OCC) costs, which continued to slide in December.
The January price increase proposal thus represents an important test for producers’ ability to raise prices, which fell behind the pace of overall inflation in 2023, in the absence of traditionally supportive market conditions. After the $60-per-ton January increase projected in the baseline forecast, we expect prices to stabilize over the rest of 2025.
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What’s next for US containerboard?
We expect operating rates to gradually rise in 2025, with demand and supply re-balanced by some combination of a more robust demand recovery and further capacity rationalization, setting the stage for another price increase in early 2026. After 7% per year average price increases in 2025 and 2026, we expect the pace of containerboard pricing gains to decelerate to the pace of overall inflation.
The fluid US tariff situation presents ambiguous risks for the US containerboard and corrugated market, with wide-ranging potential consequences for domestic industry, exports, recycled fiber and the availability of select grades.
How will potential tariffs impact the US containerboard market?
Even though the US does not import very much containerboard, the incoming Trump administration’s stance and policies on tariffs could have a major impact on the market due to global demand, recycled fiber, currencies and domestic industry.
Because of the high degree of fluidity and uncertainty regarding the shape and form of any tariffs on Mexico, Canada, China or other countries, this month’s forecast does not attempt to incorporate tariff risks into the baseline forecast, though the impact of tariffs could serve as triggers for high-side or low-side risk scenarios.
How are other commodities being affected?
The end of the calendar year is typically a slow time in the boxboard market: the holiday rush has passed and the push to stock up for spring and summer food season has yet to begin.
Downtime is not uncommon as people celebrate the holidays. Reports are that this year was stronger than anticipated. A number of explanations were suggested. It could be that buyers were simply stocking up in anticipation of being out over the holidays, or that this was simply a return to normal after the destocking experienced last year.
Buyers could also be anticipating a strong start to 2025, while some buyers may be stocking up to mitigate any possible price swings should an East Coast port strike materialize in January. No matter the reason, the boxboard market heads into 2025 with renewed momentum. Boxboard prices were flat in December. In 2024, prices of recycled fiber board performed better than virgin fiber board.
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