Global cartonboard markets presented a deceptively stable picture in July 2025, with apparent demand growing just 0.4% year-on-year and operating ratios holding steady at 79%. However, this overall stability masks significant regional variations that are reshaping market dynamics across Western Europe and Asia.

Western Europe navigates capacity expansion amid weakening demand

Western European cartonboard markets are experiencing a notable paradox. While demand and shipments have been weakening recently, operating ratios remain relatively strong at 84% in July. This resilience is partly attributable to capacity reductions, including the recent cutback at Metsä Board’s Tako mill in Finland.

However, operating ratios are still considerably lower than a year earlier. The primary driver is ongoing capacity growth, which reached 2% year-to-date, largely due to Stora Enso’s new 750,000 tpa machine at Oulu, Finland, which started up earlier this year. Meanwhile, production has declined 3% year-to-date, creating pressure as new capacity ramps up against a backdrop of softening demand.

Asia experiences price recovery after months of downward pressure

The “Big Asia” region presents a different challenge. Capacity is growing strongly, pushing operating ratios approximately 6% below year-earlier levels at 74% in China, Japan, and Korea. Demand and production growth have been modest, hovering between zero and 2% this year.

This capacity expansion initially drove prices downward for much of 2025. However, the market has shown signs of stabilization in recent months, with cartonboard prices recovering over the past couple of months. This recovery has been supported by a moderate improvement in demand trends and coincided with increases in some Chinese pulp prices.

Regional operating ratios highlight market disparities

The July 2025 three-month moving average operating ratios across regions illustrate the varying market conditions:

Western Europe maintained 84% operating ratios, while North America achieved 86%. In contrast, China, Japan, and Korea operated at 74%, with the rest of the world at 76%.

Implications for procurement strategies

For procurement managers sourcing cartonboard, these regional differences create both challenges and opportunities. Western European capacity additions may create favorable conditions for buyers as new production comes online, while Asian markets show signs of stabilization after a period of price weakness. Understanding these regional dynamics becomes essential for optimizing sourcing strategies and timing procurement decisions effectively.

For real-time cartonboard and packaging prices, visit: app.vespertool.com