- Kraft paper markets firmed through Q2’26 as mill actions, tighter recovered fibre, and improving packaging orders supported sentiment across key regions.
- Feedstock pressure came from reduced OCC availability, higher wastepaper costs, energy expenses, and logistics disruption, especially across Asia and Europe.
- Downstream demand improved from e-commerce, export cartons, express parcels, and specialty packaging, while industrial offtake remained moderate in Europe.
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.