KapStone moves to raise U.S. containerboard prices by US$50/ton, effective Aug. 17, appears to be first price announcement this time around, says Venture Research Partners, which gives attempt a 50/50 chance of succeeding in H2
July 13, 2012
(Industry Intelligence Inc.)
– A US$50/ton price hike on U.S. containerboard grades starting Aug. 17 has been announced by KapStone Paper and Packaging Corp., according to Chip Dillon, a paper and forest products industry analyst at Vertical Research Partners, on July 13.
KapStone, the fifth largest containerboard producer in the U.S., appears to be the first to move on U.S. containerboard prices this time around, said Dillon in a July 13 research note.
If the hike is implemented, benchmark 42-lb. linerboard prices in the Eastern U.S. would increase to $690/ton from $640/ton, a level that has not changed since April 2010, according to Vertical Research Partners.
Dillon said that he gives the hike a 50/50 chance of succeeding in the second half due to market conditions. KapStone, which has just 4.1% of U.S. containerboard and kraft paper capacity, also is too small to make an impact alone, he said.
U.S. market conditions could support the hike as inventories are relatively low and there are a limited number of open-market sellers in the recently consolidated industry, despite sluggish box demand, said Dillon.
However, prices elsewhere across the globe have dropped in recent months. A recent increase in Europe’s kraftliner prices of €45 (US$55) per tonne was offset by the rising value of the dollar, according to the research note.
KapStone’s headquarters are in Northbrook, Illinois.
The primary source of this article is Vertical Research Partners, New York, New York, on July 13, 2012.