For the Quarter Ending September 2024
North America
The price increase in Cardboard in the United States is largely influenced by a confluence of rising costs in raw materials, labour, and transportation, coupled with broader economic and regulatory pressures. Supply chain disruptions have led to significant shortages of essential raw materials, driving up costs across the board. The heightened demand for cardboard, particularly from the booming e-commerce sector, has intensified the supply-demand imbalance, compounding these challenges.
On the supply side, North America is facing significant hurdles due to adverse weather conditions, including hurricanes and typhoons, which have disrupted logistics and production activities. These extreme weather events have severely strained supply chains, resulting in delays for raw material deliveries and hindering the production timelines of cardboard manufacturers.
As manufacturers contend with these multifaceted challenges, the outlook for cardboard packaging prices remains uncertain. The interplay of rising costs, supply chain instability, and fluctuating demand will likely continue to shape the market in the near future. In the quarter end, the cost of Cardboard settled at USD 530/1000 pcs on a FOB Illinois basis.
APAC
In the APAC region, cardboard prices held steady throughout Q3 2024, largely due to weak demand from downstream sectors. The slowdown in key industries, including packaging and consumer goods, contributed to this stable pricing environment. As consumer behavior shifted and economic activity cooled in several countries, manufacturers faced challenges in maintaining robust sales. In India, however, the cardboard market experienced a notable decline, with prices dropping by 15% Ex-Mumbai. This decline was influenced by a combination of factors, including reduced production rates and increased competition among suppliers. Despite the drop in prices, the overall demand remained sluggish, limiting any significant recovery. Additionally, feedstock woodpulp prices also fell in Asia, further impacting production costs for cardboard manufacturers. While the reduction in woodpulp costs could offer some relief, it was not enough to offset the persistent weak demand. As Q3 came to a close, industry stakeholders remained cautiously optimistic about the potential for a rebound in demand. However, without significant improvements in downstream consumption, the outlook for the cardboard market in the region appears uncertain.
Europe
In the European region, cardboard prices remained stable throughout Q3 2024, primarily driven by weak demand from downstream sectors. Despite challenges in the manufacturing and service industries, consumption of cardboard in the goods and services segments has shown relative stability. However, the softer growth in the European economy raises concerns about the anticipated demand recovery in the latter half of the year. The ongoing reduction in new orders signals a cautious market outlook, particularly in key economies like Germany and France, which have underperformed compared to other regions. This stagnation is compounded by high input prices and inflationary pressures, which are keeping overall inflation levels elevated, likely surpassing the European Central Bank's (ECB) 2% target. Such economic conditions may further delay the ECB’s schedule for interest rate cuts, inhibiting investment and spending that could stimulate packaging paper demand. As industry stakeholders assess the landscape, they remain watchful for any signs of recovery. Until there is a marked improvement in economic conditions and a resurgence in new orders, the cardboard market may continue to experience challenges in achieving significant growth. In the quarter end, the cost of Cardboard settled at USD 210/1000 pcs on an FD Hamburg basis.
