Paper price development - price comparison of corrugated board with other

Corrugated board is a material in demand. Since e-commerce and the entire online mail order business have experienced a major upswing in recent years, corrugated board has never been more in demand as a basis for boxes and other packaging material. The fact that corrugated board is a sustainable material also plays a role.

Environmental compatibility and sustainability are in vogue. The waste paper ratio for corrugated board is 80 percent. But what about the price development of this trend material? Is corrugated board comparatively expensive? What does the price of corrugated board depend on? We have compiled the most important information for you in this article.

What influences the development of paper prices?

For the different types of paper, various factors are relevant for the price development.

Corrugated board (recycled paper)

Corrugated board is mainly made of recovered paper. However, it also contains a smaller proportion of virgin paper fibers. What is needed to produce corrugated board? Above all, large quantities of waste paper and water. The entire production process costs energy.

The main price factor for corrugated board is the price of waste paper. If you now expect waste paper to have a stable market price, you are mistaken. The price of recovered paper is subject to fluctuations.

This is primarily because demand for recovered paper is not limited to Germany and the EU. There is interest in recovered paper worldwide. From a global point of view, China is the main demand country for corrugated board. This is where most corrugated board is used worldwide.

The development of the price of recovered paper therefore depends to a large extent on whether there is global demand for recovered paper in a given period. Energy prices, such as for natural gas, are also possible price drivers in the production of corrugated board.

Fresh fiber paper

The prices here indicate how much fresh fiber is offered. This depends on how much wood is available for paper production. Here, too, the global supply determines the development. Even more intensively than in the production of corrugated board, paper production from fresh fiber costs energy. Rising energy prices can drive up paper prices.

For which industries is the development relevant?

Production The first: paper is produced in industry for various industries.

In addition, a differentiation should be made between different types of paper. For some special types, the manufacturing processes are more complex, which is why prices are logically higher. Statistics on the development of paper prices are therefore only meaningful in detail if a distinction is also made between these special types of paper:

Testliner
Corrugated base paper
Corrugated paper
graphic papers and cardboard
uncoated and uncoated paper
Newsprint

These paper grades represent some important segments for which the price development must be considered individually in each case if one is aiming for an overall picture. Here, individual areas can rise sharply in price, while others increase only slightly or not at all

Recently, paper prices have risen overall, although the individual segments have in some cases had different partial developments.

Paper price development in recent years

In recent years, paper prices have risen sharply in their entirety. From the beginning of 2022 to the middle of the year, paper has generally increased in price by around 27 percent.

In the month of November 2022 alone, the year-on-year price increase is 28 percent(price development refers to wholesale prices for paper, cardboard and related writing products).

However, the statistics report falling prices for recovered paper in October of the same year due to lower world market demand.

How can these figures be interpreted? Since the middle of 2021, a strong increase in paper prices can be seen. Among other things, demand in Asia for recovered paper increased. The background to this is the resumption of growth, particularly in China, which followed the Corona crisis. Greater demand for recovered paper is reducing stocks and causing prices for corrugated board to rise.

During the same period, there were some supply bottlenecks for the raw material wood. The reasons for this cannot be fully understood. Disrupted supply chains may be a significant aspect. So can increased demand.

From February 2022, the supply of energy plays an increasingly important role in prices. The whole of 2022 is dominated by industry concerns about not having enough gas to run businesses. Increased energy prices have also led to some businesses cutting back or even shutting down production altogether. In some cases, this development can lead to a drop in demand for recovered paper, for example, and lower prices in one segment.

Overall, the development of paper prices is dependent on a number of different factors. This makes the initial situation volatile. Although the price development has been showing a relatively stable upward price trend for some time, there are strong fluctuations in individual segments such as recovered paper.

The entire paper industry is also undergoing a kind of upheaval. Sustainability and environmental compatibility are becoming increasingly important. The search for new source materials such as grass is entering a phase of feasibility.

The industry is also struggling with declining demand in Germany and Europe. As many consumers are now increasingly using digital products with print media, demand for paper is falling here. Falling demand does not always mean lower prices. Paradoxically, if less is produced, prices can even rise.

While prices for paper in general have been steadily rising in recent months, the price of recovered paper has fluctuated sharply in some cases.

Is corrugated board a cheap packaging material?

Corrugated board is popular and widespread as a packaging material.

This question cannot be answered in one sentence. In principle, corrugated board could be and remain a relatively inexpensive packaging material. The prerequisite for this is that the predominantly used recovered paper does not become too expensive. As we have seen, its price depends on global demand.

Compared with virgin fiber paper, corrugated board should always be considered the cheaper material. However, this is not always the case. Enough virgin fiber still reaches the market that is produced under non-sustainable conditions - for example, from rainforest wood .

This paper (respectively the cellulose starting material) is often offered at very favorable prices on the world market. It not infrequently costs less than corrugated board and/or recycled paper.

Nevertheless, corrugated board is a favorable type of paper in comparison over a longer period of time. Energy consumption is lower than in the production of paper from virgin fiber. Normally, there is also plenty of waste paper.

Are there cheaper alternatives?

At present, there are no generally more favorable alternatives to corrugated board. Paper types made from renewable raw materials such as grass have potential. However, these are not yet available in large quantities. The alternative types of paper currently occupy a niche.

That's why you can't get around corrugated board as a low-cost packaging material. This is especially true for the quantities of shipping cartons and filling material needed for transport in the B2B sector and in the private sector in online shipping.

It should also not be forgotten that Germany, as a leading export nation, is dependent on large quantities of shipping packaging. Here, corrugated board in all its forms is currently indispensable and also comparatively inexpensive.

Outlook: Price development in the near future

It is difficult to estimate how paper prices will develop in the near future. In view of the continuing energy shortage, at least in Germany/Europe, further price increases are to be expected.

In the case of corrugated board in particular, it again depends on global demand and thus also on recovered paper prices what prices the industry will call in the near future.

However, energy is also needed to produce corrugated board, so this particular branch of paper production is also affected by rising energy prices.

It is likely that demand for certain papers in the print media sector will fall even further. However, if this leads to a shortage of production sites, the drop in demand may not represent falling prices.

The paper industry is struggling. Consumers will therefore almost certainly have to prepare for further price increases. Inflation in Germany and Europe also has a part to play in this.

It will be exciting to see whether the development of alternative sources for paper production will continue to be driven forward by the industry. Financial resources must also be available for this. There is a need for further research in individual areas.

Concepts that have already been tested must be transferred to competitive, industrial production. It is not possible to predict how companies in the paper industry will continue to react to alternatives such as grass paper.

In the majority, these alternative papers are not yet accepted. It is possible that the current situation regarding raw materials and energy is forcing all parties involved to rethink.

The paper market remains volatile. This also applies to the question of a further growing environmental awareness and the reduction of consumption. The paper industry has to deal with the fact that we are all using paper more sparingly for environmental reasons. This may lead to a loss of sales for industry players. However, companies also have the opportunity to generate new revenue through alternative concepts for paper.

At any rate, the packaging and e-commerce segments will not be able to bypass corrugated board for the foreseeable future. Many consumers will not want to give up ordering online, even if the prices for cartons and cardboard rise. We will have to wait and see how a balance between price and demand is achieved.

Conclusion: Corrugated board remains attractive as a packaging material

Indispensable in the mail order business and for transport in general, corrugated board remains a key factor in the paper industry. The price development depends on the prices for recovered paper. It is impossible to predict how this development will continue, as global demand also has a significant influence.

Real alternatives to corrugated board, which is still relatively inexpensive, are currently not available. If alternative paper forms such as grass paper make further leaps in development, they may have a promising future. Even then, however, it is not certain that they will be able to displace corrugated board. It is possible that in the near future there will be mixed forms of grass paper and recycled waste paper, which could also be interesting in terms of price development.

FAQ

Is corrugated board a comparatively inexpensive type of paper?
Normally, yes. However, the price of waste paper fluctuates, which affects the price of corrugated board.

Is the trend towards higher paper prices likely to continue?
This cannot be assessed conclusively at present. However, if energy prices continue to rise, further increases in paper prices can also be expected.

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