US boxboard mills saw a large number of shutdowns in the third quarter, causing US starts to fall to 87.6% in the third quarter from 94.8% in the second quarter of the year. Despite this, this week buyers and sellers said that fluctuations in boxboard capacity at boxboard mills this month were not seen as a market factor for unbleached kraft paper. Instead, contacts reported a slowdown in demand, but said the pace was sufficient not to cause prices to fall further. Paper for cup

　　According to Fastmarkets’ PPI Pulp & Paper Weekly pricing survey, the price of lightweight 30lb unbleached kraft paper for grocery shops has fallen twice in the past four months, by $20 per tonne in August and $10 per tonne in October. prices for other grades tracked by PPI Pulp & Paper Weekly have not changed since August, except for 50lb unbleached high-strength extendable The other grades tracked by PPI Pulp & Paper have remained unchanged since August, except for 50lb unbleached high-strength stretchable multilayer kraft paper, which rose by US$30 per tonne to US$1,230-1,260 per tonne. Paper cup material manufacturers

　　According to a survey by PPI Pulp & Paper Weekly, prices for 50lb unbleached natural multilayer kraft paper and 30lb bleached kraft paper for fast food and grocery use in North America have remained unchanged over the past four months. Due to lower demand, especially in September, contacts indicated that orders had decreased over the past few months. Despite this, one producer indicated that it was sold out for the month and another indicated that orders needed to be sent quickly to customers who had recently reduced their orders too much. Paper cup raw material

　　Domtar, Cascades and Nine Dragons are all developing new capacity for recovered containerboard and they will also produce some unbleached kraft paper. It is unclear how much additional unbleached kraft paper supply will be available in North America. According to PPI Pulp & Paper Weekly estimates, it could be as much as 220,000 tonnes/year, which would represent a 10% increase in unbleached kraft capacity in North America.

The amount of this new capacity for the production of unbleached kraft paper and when it will start is uncertain, contacts said. A contact with a producer said that the backlog of orders for unbleached kraft paper has been reduced significantly, from four to six months last year to about six weeks today for certain unbleached grades. Paper cup material

　　Several sources said that, according to the contact, Mundy produces premium high strength and high performance malleable kraft grades and that they are particularly interested in US orders. Some suppliers believe that the high performance 50lb malleable grades used primarily in cement bags globally may soon face downward pressure on prices. Others point to good demand for bleached fast food/grocery lightweight papers. Paper cup fan

　　”People are ordering a little later than they did in the summer,” said a contact sheet for a producer of unbleached kraft paper, “so we’re doing okay, but not as strong as we were in May, June and July. …… Despite the sharp drop in waste corrugated (OCC) prices, we’re not under pressure from falling prices.”  Raw material for paper cup

　　Some producers said lower scrap corrugated (OCC) prices would continue to rise at least until autumn 2023, despite about 2 million tonnes of additional recycled containerboard capacity starting up from next month through to the first quarter of 2023, with FOB prices in the US at $30-40 per tonne in early November. Paper cup material price

　　Some indicated that a pick-up in demand for used corrugated containers (OCC) from new recovered containerboard capacity would not be felt until mid-2023, noting that containerboard starts are expected to decline in the fourth quarter of 2022. New recycled containerboard and unbleached kraft capacity is planned for the Longview, Washington; Whitby, Ontario; Kingsport, Tennessee; Ashland, Virginia; and Byron, Wisconsin mills.

　　Lower waste corrugated container (OCC) prices have helped improve margins somewhat. One producer said that lower scrap corrugated carton (OCC) pricing (down about $100 per tonne in the domestic market last year) meant that the unbleached kraft manufacturing company saw a 3-5 percentage point increase in margins today. Paper cup fan manufacturers

　　In addition, domestic prices for Mexican containerboard were reported to have fallen by around 500 pesos per tonne in January, supported by lower scrap corrugated carton (OCC) prices and increased paper mill inventories. Market participants had mixed views on the price reduction. Some said the drop was limited to around 300 pesos per tonne due to continued high production costs, while others said the drop was much greater – up to 800 pesos per tonne. Paper cup raw material and blanks

　　At least one source also said that some very low spot offers were starting to appear. “I’ve heard everyone talking about very limited drops, but all of a sudden I’m getting offers of around P12,500 per tonne for hanging cardboard, which is very shocking,” the source said. Paper cup raw material in china

　　Overall, there is room for further pressure in the market due to low scrap corrugated cardboard (OCC) prices and ample supply in the US market, but the source noted that demand picked up in some way in November and could help keep prices more stable going forward. “We saw a slight upturn in demand in November, with sales taking place over the year-end holidays and our Black Friday, which lasted four days,” said one contact.

　　Certainly not as frenetic as we saw in the early days of the new crown epidemic, but demand was good and the agricultural season for exports had begun. Another market participant agreed that there was limited sales growth in November, supported by increased demand for football World Cup-related beer. “This is a big deal for Latin America, it has reactivated demand not only in the domestic market but also for exports. Mexico is a major supplier of beer and a major user of beer carton packaging,” the source said. PE coated paper cup fan

　　A price survey by Fastmarkets found that domestic hanging board in Mexico was trading at 14,300-15,300 pesos per tonne in November, still 2.1 per cent higher than a year ago, while local corrugated medium was negotiated at 13,300-14,300 pesos per tonne, up 2.2 per cent year-on-year.

　　Kraftlinerboard prices from the US also fell a further US$10 per tonne, trading at US$750-790 per tonne, down 1.3 per cent year-on-year. Another source said that although the cost of used corrugated containers (OCC) is now lower, other materials and inputs are still more expensive and workers’ wages are becoming more costly. Paper cup bottom raw material

　　”Labour costs in Mexico will generally increase in January as we will see an update on the minimum wage, which we believe will be around 10-12 per cent higher. We also expect gas prices to rise again as winter approaches, so I think there is limited room for prices to fall,” the source said.