Companies in the Board and Corrugated Industries plan to join International Paper in raising prices in June with increases earlier in the year. You can expect increases from $50.00 – $80.00 per ton for corrugating material. Based upon the previous price increase, there are questions about whether the prices would stick. Industry observers and analysts see demand has been weak over the past two quarters. It is expected that the trend will continue. We have seen investments in new plants and equipment. However, we are seeing companies idle or shutdown older facilities and lay off employees!
We have witnessed prices for OCC, a major feedstock, continue to increase over the past 5 years. In 2017 China shutdown taking the USA recycled stock which provides abundant of recycled pulp in the USA. However, recycled pulp replaced virgin pulp production in the USA with just 3 Wisconsin Based companies producing virgin pulp. We have seen China and Indonesia USA based companies convert to packaging grades competing with USA based companies. China’s Nine Dragons is planning to increase the company capacity by 10%. This means an additional 2 million tons of goods including folding carton, sack kraft paper and printing/writing grades of paper. Indonesian based Paper Excellence/Domtar Kingsport, Tennesee expansion in packaging grades makes the site home to the second largest recycled containerboard machine in North America.
In May 2024, reports surfaced that Brazil’s Suzano Pulp and paper company made an offer to buy International Paper for $15 Billion in an all-cash deal. The USA has continued to SELL OUT the Paper and Pulp industry. It is time to rebuild and support the Wisconsin Paper and Pulp industry. Wisconsin Paper and Pulp Manufacturing is down to 8,200 people with our Paper and Pulp equipment ranging from 50 to 120 years old! I spent time with a industry experts discussing paper and pulp manufacturing and putting together a report on the Paper and Pulp Industry in Wisconsin. The BIGGEST feedback is the Wisconsin Paper and Pulp Industry is limping along trying to keep the OLD EQUIPMENT running with limited investments to upgrade their manufacturing.
Wisconsin Government and Industry will have to decide the importance of Paper and Pulp Manufacturing in Wisconsin. We have a lot of companies dependent on Paper Manufacturing in Wisconsin. We will be putting out further information on the need to rebuild paper and pulp manufacturing in Wisconsin. I have prepared a presentation on the status of Paper and Pulp Manufacturing and its impact on other industries and employment. I will be traveling across Wisconsin and visiting facilities doing my presentation.
Trends and Updates
- We are seeing E-commerce sales continue to grow and consumer spending has seen a slowdown over the past two quarters.
- We are witnessing corrugated companies’ idle capacity and shut down older facilities!
- Amazon is looking at more venues to reduce packaging and it will have a significant impact on the Corrugated Industry!
- We can continue to see price increases due to inflation and operating costs!
