corrugated price increase Tag

11 May 2010 Mills Gone Wild or How to Play Safely in a Fast Rising Market

What may sound like a story about intoxicated college students on Spring Break is really not that at all. It is about a paper and corrugated box industry that has just announced a second, substantial price increase in less than four months. It’s definitely not fun and the only “wild and craziness” involved here is an effort to try to keep up and minimize fast rising product costs, while many of our customers resist increases and are simply working hard to survive.

Are the Paper and Corrugated Increases Justified?

My personal opinion is no, they are probably not but then again who knows. As a non-manufacturing distributor of corrugated products, our largest competitor is but a flea in the overall market and scope of an industry that measure sales in terms of tons and billions of dollars. There is a lot of industry talk about expired government subsidies, a shoot out between two major mills with the rest of us as innocent bystanders caught in the cross fire and of course the ability of the industry to control pricing by controlling output and production. The week of January 22nd Pulp & Paper reported an increase of $50 per ton on liner board and the end result was an increase on corrugated boxes that ranged from 6 to almost as much as 10% depending on the manufacturer. This most recent increase announced the week of April 23rd of $60 per ton, is likely have a similar impact in terms of increase percentage on box pricing.