First Read: Graphic Packaging Holding "Limited impact on boxboard markets..."

Research evidence excerpt

First Read: Graphic Packaging Holding "Limited impact on boxboard markets..."

0.14

continued FBB imports and the July 2025 startup of Sappi’s Somerset, ME, conversion Q3E 0.32 0.36

(~470k tons nameplate), which is still ramping but expected to reach ~85% utilization Q4E 0.29 0.26

by year-end 2026. In other words, the market has not yet fully absorbed recently added 12/26E 0.82 0.84

capacity, suggesting considerable slack remains. While Nippon could source incremental 12/27E 1.07 1.18

tons domestically, it also has viable international alternatives, including Stora Enso’s new 12/28E 1.14 1.27

Oulu, Finland, mill (link) and the upcoming Karawang, Indonesia FBB capacity (APP

Anojja Shah

subsidiary) (link). At most, we expect any domestic sourcing to result in modest Analyst

tightening at the margin, rather than a structural shift in supply-demand balance. anojja.shah@ubs.com

+1-312-525 4310

Substitution to cupstock: limited and constrained

Joshua Spector, CFA

We see limited scope for substitution from cupstock, and therefore only indirect Analyst

implications for GPK. While LPB and cupstock both require barrier coatings for liquid joshua.spector@ubs.com

resistance, LPB is generally more specialized and subject to stricter performance and +1-212-713 6188

qualification requirements. This helps it to command higher prices which would be Gaurav Sharma

positive for GPK, but switching tends to be limited in practice as it is dependent on Associate Analyst

coating capabilities and customer approvals. Geography also matters - GPK's Texarkana, gaurav-l.sharma@ubs.com

TX, mill is not well-positioned relative to Longview. Figure 1 shows producer market +1-212-713 4312

shares across all grades of SBS.

Highlights (US$m) 12/23 12/24 12/25 12/26E 12/27E 12/28E 12/29E 12/30E