Trends Report (CONT’D FROM PAGE 18)
actual folding carton prices for several years. “To provide some perspective, market prices for carton board grades increased at a 5.1 percent average annual rate from 2012-22; over that same 10-year span, folding carton average values per ton increased by an average of 2.3 percent annually. “Coming out of the recession, average carton values were relatively stable in 2009 and 2010, but average boxboard prices in 2010 were 5.3 percent higher than in 2008. After boxboard costs increased another 7.4 percent in 2011, converters were forced to raise folding carton pric- es to prevent any further margin erosion but only gained 2.3 percent in average carton values. “From 2012-17, the folding carton average value per ton fell at an average of 0.5 percent per year, losing ground on boxboard prices, which grew at a 1.5 percent rate. “Around 2014-16, the flood of folding boxboard entering
2021 before jumping 3.7 percent in 2022. Tonnage volume reached 446,000 tons, translating to C$1.25 billion. “The macroeconomic environment in Canada over the outlook will be supportive of carton shipment growth, how- ever, the planned closure of a cartonboard mill in 2026 will reduce Canadian folding cartonboard capacity by nearly 30 percent. “This will greatly reduce the amount of folding cartons that can be produced and shipped in Canada. As a re- sult, folding carton shipments are expected to decline by 2.7 percent per year over the next five years and fall to 388,000 tons by 2027.” The report continues, “On prices, the situation is some- what challenging, particularly for independent converters, mainly due to carton board prices consistently outpacing
the global market provided some tempo- rary leverage to independent converters in price negotiations with suppliers. “However, mill closures reduced capac- ity, and with demand and producer costs rising, boxboard prices shot up significant- ly, swinging the market back in favor of integrated producers and sellers of box- board to the open market. “Over the past five years (2017-22), prices have become a more significant challenge for independent converters, as boxboard prices grew at an average rate of 8.9 percent per year, while the average value per ton for folding cartons rose just 5.2 percent. “The US folding carton end-use mar- kets can be grouped into three broad cat- egories: growth, mature and declining. “Growth markets are classified by aver- age annual growth of 1 percent or more. According to our analysis, four end-use markets are poised to grow by more than 1 percent per year. “Nine end-use segments are classified as mature markets and are expected to maintain current levels of demand over the five-year forecast cycle. The remaining four market segments are classified as a declining market this year.” The end-use markets analyzed in the full 2023-24 Trends Industry Outlook & Market Data Report are food products (beverages, cereals/milled grains, frozen foods meat, etc.) and non-food products (cosmetics, hardware, converted paper products, pharmaceuticals, etc.) PPC members have unlimited access to the full report. For more information, visit paperbox.org .
DESIGNS THAT INCREASE PRODUCTION
ASDI offers: • 40 years of experience with separators, cyclones, conveyors and more • Sequential, Zero-Defect and various types of Scrap Systems • Each system is guaranteed to meet customer specifications • T urnkey Systems-handling all grades of paper and paperboard • In ground and overhead return conveyor systems direct to balers • Replace your undersized or aging cyclone over a two or three-day weekend • Representing a complete line of shredders, wet scrubbers and filters • NF PA compliant systems, ISN Network
Air Systems Design Inc .
50 East Court Mandeville, La 70471
Ph: 985-875-7777 Fx: 985-875-7778
\
email: sales@airsystemsdesign.com • www.airsystemsdesign.com
20
www.boardconvertingnews.com
December 4, 2023
Made with FlippingBook - Online Brochure Maker