What are the latest numbers for industry containerboard pricing and inventory telling you?
Today’s post is by Mark Davis; Senior Vice President COO at SafeSourcing.
What are the latest numbers for industry containerboard pricing and inventory telling you about your corrugated cardboard needs?
With a $50/ton containerboard increase last fall and what some industry experts are saying may be another increase coming in early 2013, now may be the perfect time to look at sourcing your containerboard needs. While this was happening, Hurricane Sandy was affecting many North American inventory levels, but industry reports released have shown a return to higher than average inventory levels for December and January.
What do these trends mean for businesses that regularly use corrugated cardboard in their day-to-day operations?
Future price increases are one of the major reasons for sourcing containerboard needs now in order to lock in prices before increases hit. While most contracts will still be tied to pulp indexes, getting agreements in place now will allow you to take advantage of those prices before the increases hit and may justify the warehousing of pre-purchased stock at lower prices.
North American export levels finished at slightly lower levels in 2012, however industry experts are predicting that export levels are expected to increase in 2013 cutting into available inventory and increasing the demand of suppliers. Many manufacturers such as International Paper are increasing capacity through acquisition and renovation in order to absorb the increased demand levels.
With potential price increases in containerboard coming and demand increasing, it is no wonder that traditional mills have begun to move production of traditional paper types such as newsprint to the production of containerboard in order to leverage the trends. This increase in sources is good for customers who have the opportunity to investigate new suppliers that may be a better fit for them in terms of service and geography.
If you are a business who uses linerboard or corrugated board products, now may be the perfect time to think about sourcing your needs to avoid potential future increases or possibly to investigate suppliers who can provide you a better mix of product and services.
To understand more about how we can help you source your containerboard needs, please contact a SafeSourcing Customer Service Representative.
We look forward to your comments.