Pettinari on Paper & Packaging: Is a Third Containerboard Price Hike Possible? Further Reads on 2Q Demand

Research evidence excerpt

Pettinari on Paper & Packaging: Is a Third Containerboard Price Hike Possible? Further Reads on 2Q Demand

ce hikes in January; Containerboard price hikes

more often come in the spring (we model the next hike in 2Q ’27). We’ll listen for

more detail on industry supply/demand when PKG kicks off Containerboard

earnings 6/22. For IP (reporting 6/30), it may be difficult to make up lost

production from Pine Hill; assuming 1 month of lost production at current market

prices implies $65-$70mm lost revenue in 3Q. We remain positive on

Containerboard and Buy-rated on IP & SW.

GPK enters URB; will Boxboard see long-awaited price support? – We expect

some improvement in Boxboard prices when benchmark prices are updated on

Friday AMC. We’re most optimistic for improvement in URB (est. +$50-$60/ton)

which has been the strongest grade YTD; URB producers have +$60/ton increases

slated from 7/6 to 7/13. Lead times have reportedly been as high as 8-9 weeks and

some mills are turning down short-term asks. Notably on Monday GPK announced

it would enter the URB market with the launch of its PaceSetter Ridgeline product;

GPK indicated its Waco facility enables “seamless transitions” between CRB &

URB, giving the company “flexibility to respond quickly to shifts in customer

demand.” While no production target was given, Waco has a production capacity of

500kt (we expect most of this to remain CRB); a modest potential negative for

SON. CUK could see some price improvement in July (est. +$30-$40/ton)

following proposals for +$60/ton price increase effective June 8; demand has been

generally stable, supported by a healthy beverage season. SBS could also see some

level of price support (+$30-$40/ton) considering rising costs and incrementally