According to multiple sources, shares of major paper and packaging producers sold off last week after a surprisingly weak containerboard pricing update. International Paper slid 7.1 percent, Packaging Corporation of America (PCA) lost 6.8 percent, and U.S.-listed shares of Smurfit Westrock retreated nearly 5 percent in the wake of the pricing news.
Analysts at global wealth management firm, Stifel, say the declines followed the latest packaging paper and board price data for February released by index provider RISI. The new figures showed an unanticipated drop in containerboard prices, which pressured sentiment across the sector.
Stifel said RISI reported that containerboard prices fell by $20 per ton in February, a move described as unexpected and driven by increasing discounts in the market.
By contrast, boxboard grades were unchanged from the prior month across all categories for the second month in a row. This stability came after SBS Folding paperboard had already recorded a cumulative decline of $100 per ton across November and December. Stifel noted that the February price index for boxboard grades was in line with expectations.
Stifel pointed out that Graphic Packaging, Smurfit Westrock, and Sappi are the companies with the greatest exposure to U.S. paperboard pricing. Kraft paper prices also held steady on a month-over-month basis, which the firm said was consistent with its forecasts.
Stifel emphasized that International Paper and Smurfit Westrock are the names with the most direct exposure to the recent containerboard price decline. The firm said this pricing pressure is likely to act as a headwind for their shares in the near term and acknowledged that it had not foreseen this particular price move.
