First containerboard price increase most likely to happen in February-March 2010

Jul 20, 2009. /Lesprom Network/. While most sectors of the paper industry have felt the sting of the tough economy, containerboard producers have weathered the recession in remarkable fashion, but they've got a ways to go, says Mark Wilde, senior analyst at Deutsche Bank, according to PaperAge magazine. After polling a variety of trade contacts, Wilde feels prices will remain stable through July because there has been no evidence of recent erosion in domestic spot market prices (June prices: corrugating medium $510/ton, linerboard $540). But, he's not convinced prices have bottomed for the cycle. “We're even less swayed by arguments about a prospective pricing initiative this autumn,” Wilde notes. “In our survey, most boxmakers and containerboard brokers point to continued sluggish volumes over the past 3-4 weeks. In our view, an autumn price hike in the wake of weak demand and low input costs is hard to reconcile,” Wilde said. “Moreover, we won't be shocked by modest price ($20-40/ton) erosion over the next 6-8 months,” he added. Wilde believes the first realistic shot at a price increase is most likely February/March of 2010.