Packaging / Advertising & Office

It seems that the export price of unbleached kraft linerboard (KLB) in the United States will decline again in some regions. Relevant suppliers report that the demand recovery in October will hardly occur. Globally, the situation seems similar - the demand for cardboard and corrugated boxes has declined compared with last year; Inflation began to have a negative impact on consumer spending; The cost of waste corrugated boxes (OCC) is dropping straightly, but the cost of energy, especially natural gas and chemicals, is still high, Huacheng Import and Export Data Observation reported.

"Everyone is hopeful about more carton production," said the contact of a Mexican company when talking about the rise in holiday demand, "but because of inflation, everyone is worried and very uncertain about it. Demand is indeed declining, and people are not very optimistic about the prospects."

"Demand is slow and I think the fourth quarter will be slower than expected." An American kraft linerboard exporter to Latin America added.

According to the observation report of Huacheng import and export data, Ecuador has no need to import kraft linerboard, and it is expected that the banana season will be normal. However, the domestic inventory of cardboard in Ecuador is very high, so there is no opportunity in the fourth quarter. Chile is expected to have a good agricultural season. We hope that the domestic stocks of corrugated boxes and cardboard in Chile will decline, so that we can restart our business.

A carton manufacturer in South America told us that the "normal order" would come back two months later; In Europe, it is reported that both domestic and import prices are facing downward pressure or have declined; In China, domestic boxboard mills are still struggling with high costs and reduced demand.

For the first time in more than two years, the export price of American kraft linerboard began to fall in July. In the three months up to the middle of September, the price of the United States to China fell by 85 US dollars/ton; The price for South America and Central America dropped by 60 US dollars/ton; For Southern Europe (Italy and Spain), the price dropped by 50 euro/ton; The price for Mexico fell by 20 US dollars/ton. If the US export price does fall again this month, it will be the fourth consecutive month of decline in some export prices of all four major export destinations, Huacheng Import and Export Data Observation reported.

Since the price rise in March, the domestic open market price in North America has been flat in September. The demand for cartons is weak, and the price of OCC waste paper plummets, but the manufacturing costs, including energy, remain high or rise. Some people also reported that the price of the wall board in the open domestic market is low or expected to be lower.

"As of October 12, the carton factory had a high inventory and had not received any large orders. They are trying to obtain orders," said a contact on the West Coast, emphasizing the date. In the past few months, the contact person said that the demand for cartons on the West Coast was said to be weaker or slower than that in other parts of the United States. Huacheng Import and Export Data Observation reported.

In conclusion, the contact person also said that they saw an increase in export tonnage provided by major integrated producers. "Yes, of course," said an exporter. "All large enterprises have provided in quantity. The demand in the United States has slowed down, and I expect it will. I think the first quarter of 2023 will be a challenge."

Another exporter told the factory that "they usually do not participate in the market (for export of paperboard), and those 'new' participants are very aggressive in price", especially in Mexico.

North American demand has basically fallen off the cliff - there are far more factories to export than we have seen for a long time. The contact predicted that "more downtime will occur to alleviate the weak supply and demand in North America", but "this seems to happen not fast enough". In another example, the Chinese buyer claimed that the quotation of a small comprehensive American paper mill was nearly 200 US dollars/ton lower than the market price.

According to the latest trade report of the US government and the American Forest and Paper Association (AF&PA), the export of unbleached kraft linerboard in the US increased in August, but the growth rate was lower than some people expected. The contact person continued to claim that, with the decline of domestic demand in the United States since the second quarter, the major exporters will export more kraft linerboard overseas. However, the contact person pointed out that the US paper mill had been shut down since September. All this happened in June, when the inventory of the US cardboard mills and factories was at the highest level in 20 years, Huacheng Import and Export Data Observation reported.