Europe’s paperboard market is showing its firmest run in a while, and mills are using it to push prices higher. Cartonboard demand grew for a sixth straight month in April, led by a strong upturn in Western Europe, where volumes rose 5% just as regional prices started rising for the first time after a long stretch of declines.
A picture that varies by region
The picture varies by region. North America slipped 1% in April on the latest data, though demand, production and operating ratios were all improving on a three-month average. In “Big Asia”, demand growth accelerated and production rose with it; the extra output may have reassured buyers, as Asian prices dipped in April before recovering through May and June. Western European cartonboard operating ratios sat at 84%, ahead of North America at 82% and China, Japan and Korea at 76%.
Containerboard tells a similar story
Containerboard told a similar story from a weaker base. Global demand grew slightly in April, carried by developing markets while mature regions stayed in decline, though the falls eased. Western European demand fell just 2%, a sharp improvement on March’s 7% drop, and with operating rates steady at 88% and costs climbing, producers raised prices across almost all grades. North America followed the same path: a smaller demand drop, firmer production, better-balanced operating ratios, and price increases in April.
The common thread, per EMGE, is that improving demand and rising costs are combining to hand mills the pricing power they had lacked.
