Linerboard price hike flops

By Tom Stundza -- Purchasing, 3/26/2008 9:47:00 AM

North American $50/ton containerboard price increase has failed to stick in March because of deteriorating demand for boxes, according to RISI, the forest products news service. All seven major containerboard mills had fallen in line with the price hike but this month’s buyer surveys by Purchasingdata.com confirm that the market price average for 42-lb kraft linerboard remains at $555.

RISI says there has been strong resistance from independent box converters, who believe they would be unable pass through any increase in finished box prices. Some linerboard producers may try again in April or May--although weak box demand and growing containerboard inventories in a worsening U.S. economy could make that difficult, says analyst Ross Gilardi at Merrill Lynch & Co. He says he expects box demand to remain weak for some weeks, “which could make it challenging for box producers to pass a price increase through to customers.”