Kraft paper showed a firmer Q2’26 trend as supply-side cost pressure met better packaging demand. In Asia, China strengthened after late April as rainfall disrupted wastepaper collection, drying, transport, and mill arrivals, tightening OCC availability. Mills responded with repeated hikes across kraft liner, recycled kraft linerboard, corrugated paper, and white-top grades. Demand support came from export packaging, FMCG cartons, e-commerce restocking, and express delivery, with China handling 82.87 billion parcels in January-May, up 5.2% year-on-year. In Europe, kraftliner and sack kraft stayed supported by fibre, energy, freight, and input-cost pressure, though April industrial production rose only 0.1% month-on-month, showing demand was moderate rather than strong. In North America, supply cuts supported producer discipline, as around 10% of containerboard capacity had been retired since February 2025. Packaging papers and specialty packaging shipments rose 12% year-on-year in May, supporting firmer producer sentiment.
Analyst Insight
According to Procurement Resource, in the near term, kraft paper may remain firm if OCC availability and capacity discipline stay tight, though weak industrial demand could limit further upside.
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Kraft paper prices moved upward in the first quarter of 2026 as West Asia tensions disrupted trade flows and raised production costs across the paper value chain. India’s paper industry warned that nearly 30% of its paper exports could be affected if shipping disruption continues, with kraft paper among the exposed grades. Recovered paper imports into India were also hindered by higher freight charges, opaque surcharges, and shipment uncertainty around transshipment routes linked to the Strait of Hormuz. Several cargoes were delayed, some were offloaded before loading, and mills faced tighter supply visibility. Imported recovered paper prices also rose across grades, with brown grades seeing the sharpest increase, which directly supported kraft paper prices. Higher coal, chemical, and fuel costs added further pressure, while buyers stayed active because packaging demand remained stable. At the same time, slower exports risked pushing excess finished paper back into the domestic market, which could later limit sharper gains.
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The Study Offers a Detailed Cost Analysis of Northern Bleached Softwood Kraft (NBSK) Pulp Production From Lumber Woods. In Addition, the Report Incorporates the Manufacturing Process With Detailed Process and Material Flow, Operating Costs Along With Financial Expenses and Depreciation Charges.
This report provides the cost structure of paperboard by pulping, bleaching, and coating processes.
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