Corrugated Market Shows Signs Of Stabilization Amid Capacity Cuts In a recent article on Packaging Dive , analysts suggest- ed that a prolonged down cycle in fiber markets may be nearing an inflection point, thanks to significant contain- erboard capacity reductions and a milder-than-expected tariff environment. Uncommonly large mill closures this year — totaling about 3.9 million tons, or 9.5 percent of North American capacity — could help rebalance supply and demand after years of oversupply. International Paper’s August closure of four Georgia facilities alone accounted for 1 million tons of annual capacity. BofA Securities and Truist Securities both estimate capacity reductions near 10 percent over the past two years. Even so, the recovery is not expected to be quick or dramatic. Respondents to BofA’s September survey fore- cast box shipment growth to dip 0.2 percent over the next two quarters — better than June’s projection of a 1 percent decline but still weak. Green Markets, a Bloomberg com- pany, projects Q3 2025 shipments will fall by as much as 3 percent year over year, with full-year shipments down about 2.5 percent to 3 percent. Containerboard production has dropped steadily, down 5 percent year over year in Q2 and 3 percent for the first half of 2025, according to the American Forest & Paper
Association. Box demand is down nearly 12 percent from its pandemic high, when consumer goods spending briefly lifted volumes, and producers are now reworking capacity to reflect this lower baseline. Analysts note this is part of a broader correction dating back to China’s National Sword policy in 2017 that clamped down on recyclable material imports. Demand and pricing for old corrugated containers also plays into the containerboard dynamic. Container- board producers have said high input costs contribute to the challenging market cycle, particularly for OCC, a key feedstock. Prices for the commodity shot up 245 percent year over year by mid-2024, according to Truist’s Roxland, but reversed course later in the year. Following relative stagnation in early 2025, prices have slid for the last four months. Analysts also highlight that trade outcomes could have been worse. Current 10–15 percent levies are far milder than the 50–60 percent levels once discussed early in the current administration. As trade tensions settle out, so does the trend of companies attempting to pre-buy mate- rials and products to avoid tariffs. Generally, sources believe the downward trajectory for corrugated demand could ease in Q4. But don’t expect a V-shaped or U-shaped recovery, analysts caution. “Recov- ery” might look more like a plateau, at least in the short term, though improving conditions could open the door for a price increase.
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September 22, 2025
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