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Online sales drive up containerboard prices

Thursday, 05 April 2018
By Print 21 Online Article

The new Oji Fibre Solutions facility at Yatala, QLD.

2017 will be remembered as the year in which the global containerboard industry grew in every region and there’s no sign that demand will ease any time soon, according to analyst Tim Woods.

 “Forecasts appear to have missed both the pace of growth in internet sales and the extent of their disruption of established packaging structures and networks,” says Woods, the managing director of IndustryEdge and publisher of Pulp & Paper Edge.

“Across the year, demand growth and supply-side pressures forced prices higher in major grades. There appears to be little abatement ahead for the containerboard markets, with most drivers and economic conditions pushing demand to ever-greater heights.

“The result of the demand side pressures was price increases for most grades of containerboard materials, especially in the second half of 2017. Input cost increases – pulp and energy – played some part in the rising prices, but they did not have as significant an impact as runaway demand growth and supply pressures.”

Manufacturer Oji Fibre Solutions (OFS) just opened its third Australian corrugated packaging converting facility, in Australia’s second largest – and fastest growing – market for corrugated packaging.

The $72 million corrugated box conversion facility at Yatala on the Gold Coast in Queensland will employ about 70 people. The corrugator is estimated to be able to run around 60 million m2 per annum on a single-shift basis. Oji advised they anticipated Australian containerboard growth would continue at around 2% per annum but would likely be double that in Queensland.

Woods says Oji’s growth targets seem “entirely plausible” and feed into the growing understanding that containerboard utilisation has strong growth credentials.

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