The current situation in the corrugated paper market

The paper price market for corrugated cardboard is currently in a turbulent phase, driven by a combination of strong demand from outside Europe, limited supply, rising production costs, and environmental factors. The coming three months are characterized by expected price volatility and already announced further price increases, depending on seasonal influences and economic uncertainties. Companies in this sector must continue to adapt and innovate to meet the challenges of this dynamic market.

Strong demand: Consumers continue to shop more online, increasing the need for packaging materials such as corrugated cardboard. In Europe itself, this market may have stabilized or even declined compared to the COVID period, but outside Europe, it is still significantly on the rise. Therefore, a substantial amount of old paper as raw material and new paper as base material is being exported (as much as +9%!).
Supply limitations: While demand is high, the supply side is facing challenges. Production facilities are dealing with rising energy prices and raw material shortages, affecting production capacity and prices alike.
Rising costs: The costs of wood pulp, an essential raw material for paper production, have increased. This increase is partly caused by growing global demand and logistical bottlenecks. Additionally, high energy prices have a direct impact on production costs.
Recycling challenges: The availability of recycled paper, an important raw material for corrugated cardboard, has decreased. This is due to reduced collection during the recession and higher processing costs.
Sustainability requirements: More and more companies are striving for sustainability, leading to higher demand for environmentally friendly packaging solutions. This has led to a greater focus on recycled material, further increasing the pressure on the market. Many plastics are also being replaced by paper-based alternatives.

Expectations for the next three months:

Short-term volatility: Corrugated paper prices are expected to remain volatile in the coming months. While some paper producers are trying to increase production capacity to meet demand, ongoing raw material issues and cost developments are expected to continue to affect prices.
Possible price increases: If current trends continue, the likelihood of further price increases is extremely realistic, especially if demand for packaging materials starts to grow in the run-up to the holiday season.
Seasonal influences: The last three months of the year traditionally see an increase in demand for packaging materials due to the holiday season and associated increase in online orders. This is expected to contribute to continued pressure on prices. Usually, the build-up starts right after the summer holidays.
Economic uncertainties: However, any changes in the economic situation, such as a slowdown in economic growth or changes in consumer behaviour, can also have an unexpected impact on demand.
Technological advances: Companies investing in innovative technologies and more efficient production methods can provide some relief from market pressures. Improvements in recycling techniques and production efficiency can help reduce costs and increase supply. However, this is not something for the short term.
Alternative materials: The search for alternative packaging materials may also increase, which could affect demand for traditional corrugated board in the long term.

Conclusion:

The corrugated paper market is currently in a turbulent phase, driven by a combination of strong demand from outside Europe, limited supply, rising production costs and environmental factors. The next three months will be characterised by expected price volatility and further price increases already announced, depending on seasonality and economic uncertainties. Companies in this sector must continue to adapt and innovate to meet the challenges of this dynamic market.