Higher paperboard prices flow downstream

Rock-Tenn will boost corrugated-box prices on Feb. 22 following uncoated-recycled board price hike.

Mark Spaulding -- Converting Magazine, 1/28/2010 4:46:13 PM

If six months have gone by, it's probably time for another paperboard price increase. At least that's what most folding-carton and corrugated printers must be thinking.

As of presstime, Norcross, GA-based RockTenn (www.rocktenn.com) had announced that it will increase corrugated-box prices by 10 percent and corrugated sheets by 12 percent, effective with shipments on or after Feb. 22. That downstream price hike comes after the company had previously upped its price for uncoated recycled paperboard by $50/ton, effective Feb. 8, and all its CartonMate bleached-board products by $40/ton, back on Jan. 20.

Other key suppliers, Graphic Packaging Intl. (www.graphicpkg.com) and Sonoco (www.sonoco.com) have joined the price-hike tag team as well. Both raised their uncoated recycled paperboard prices also by $50/ton, effective this month. In addition, all Sonoco paperboard industrial, converted products in the US and Canada will cost 4.5-percent more, starting Feb. 15.

"The recent nearly 40-percent increase in the cost of recovered paper...is unprecedented and a clear reflection of increased demand by recycled mills in the US and Canada and by Asian export markets," says Sonoco CEO Harris DeLoach. Prices announced recently for Old Corrugated Containers (OCC) in the southeast US increased in January from $80 to $110/ton.

Don't expect a lull in the paperboard-pricing minefield anytime soon.

"With seasonal generation lower than usual and severe weather conditions further impacting supply, we are receiving recovered-paper pricing quotes for delivery over the coming weeks that are even higher than recently established prices," DeLoach adds. "We will keep a close eye on rising raw material costs and, if necessary, take further pricing actions."