Corrugated Board Industry: Cost Pressure and Capacity Utilization Remain Very High

The corrugated board industry has drawn a positive sales balance for the third quarter of 2021. However, this continues to be blatantly disproportionate to raw material and energy prices, which are still at extremely high levels, its association said.

“In the third quarter of 2021, our industry was able to sell around 32.9 million square meters of corrugated board per working day, which is about 2.4 million square meters more than in the third quarter of 2020, representing an increase of eight percent,” explains the chairman of the German Corrugated Board Association (VDW), Dr. Steffen P. Würth. “The corrugated board manufacturers organized in the VDW have thus once again succeeded in meeting a very strong demand under difficult general conditions,” Würth continued. “Especially  skyrocketing raw material and energy prices continue to put massive pressure on the corrugated board industry. Paper prices are having the most severe impact, because they account for around 50 percent of our production costs.”

The overall price level for corrugated base paper, for which the VDW takes all grades into account on a weighted basis, rose by 66.1 percent from September 2020 to December 2021, he said. The cost of wastepaper-based corrugating medium – the main raw material for corrugated board, which is on average 80 percent recycled material – would have increased by 73.5 percent over the same period, according to data from EUWID (Europäischer Wirtschaftsdienst GmbH). Prices for corrugating medium even shot up by 83.3 percent from September 2020 to January 2022, according to EUWID. In contrast, the corrugated board price calculated by the VDW rose by just 20.3 percent from December 2020 to October 2021. “This means that the corrugated board industry has continued to bear the main financial burden in recent months, which results from the ever-new highs in paper prices,” Würth clarifies. The high energy costs further exacerbate this situation.

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