Paperboard Prognostications: July Paper Prices

研报英文原文证据摘录

Paperboard Prognostications: July Paper Prices

CRB pricing remained unchanged in July despite continued reports of weak demand and

active spot market offers from mills. Several contacts described CRB conditions as

among the weakest seen in years, citing excess capacity, substitution into SBS, weak

packaged goods demand, and pressure from imports. The SBS-CRB spread has widened

following the July SBS increase, which could ultimately improve CRB's competitive

positioning.

URB momentum easing

In another surprise, URB pricing remained flat in July, meaning that none of the second

$60/ton increase was recognized. While the first price increase in April was fully realized,

respondents indicated the second increase has been more difficult to implement.

Demand remains healthy but no longer appears as tight as earlier this spring. And there

is now more uncertainty around future market S/D balance, with GPK's decision to

produce URB at Waco, potentially adding ~200k tons (+5-10% of current industry

capacity) by 2027.

CUK demand healthy but price increases not reflected

Contacts characterized demand as healthy, supported by seasonal beverage demand

and some world cup related consumption. While some sellers reported success

implementing price increases on uncontracted business, buyers generally reported no

observable movement in contract pricing, leaving official indexes unchanged m/m.

What does it mean for the containerboard stocks?

For containerboard producers (IP, PKG, SW), flat July pricing was in line with

expectations, so we don't expect much movement in the stocks on Monday. Among the

major producers, we continue to prefer PKG and SW. We like PKG based on its pure play

North American exposure and execution track record, while SW offers additional upside