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Packaging Corporation of America (PCA) recently announced a price increase for containerboard following major US producers’ move of raising prices as these producers control a significant portion of the nation’s containerboard capacity. Starting in January 2025, prices for linerboard are set to rise by $60-70 per ton. This move is part of a broader trend among major containerboard producers, as they look to boost margins rather than responding directly to fluctuations in demand or capacity.

Although demand for containerboard remains sluggish, producers are continuing to raise prices in response to persistent pressure on margins. This approach mirrors the price increases observed in 2024, which were also primarily margin-driven.

While price increases will continue to shape the market, external factors, such as trade policies, tariffs, and new regulations, pose additional challenges and risks for the US containerboard industry, especially in terms of export. The EU’s Deforestation Regulation (EUDR), which aims to curb deforestation linked to products entering the EU, has been delayed until 2026. This delay reduces the immediate risks to US containerboard exports to the EU. Initially, the regulation raised concerns that US producers might face significant compliance costs, which could limit their ability to export containerboard to the EU and raise prices domestically. With the delay, US producers can continue their export volumes without these added costs, supporting price increases in the domestic market.

While the final version of the EUDR is expected to be less stringent than the original draft, it remains an important regulatory development that US producers must monitor closely. A stricter implementation could have forced a greater focus on the domestic market, potentially reducing export volumes and affecting price strategies.

Persisting Risk of Tariffs Poses Cautionary Sentiment for the Producers

The proposed tariffs by Trump government on containerboard exports to key trading partners—Canada, Mexico, and China—pose new risks for the US containerboard market. Tariffs on Mexico, in particular, present a notable concern, as the country is one of the largest destinations for both virgin and recycled containerboard exports from the US.

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If tariffs are implemented, the added costs could make US containerboard exports less competitive, leading to a potential decline in export volumes. In turn, US producers may focus more on the domestic market, which could increase supply and put downward pressure on prices in the short term.

Additionally, retaliatory tariffs could further complicate trade relationships and diminish the attractiveness of US containerboard in international markets. With trade barriers intensifying, US producers may face challenges in maintaining their export volumes while attempting to raise domestic prices.