Industry shipments of corrugated products increased 4.2 percent, from 35.888 bsf in October of 2019 to 37.396 bsf in October of 2020, the Fibre Box Association (FBA) reported. The increase comes despite the fact there was one less shipping day in October of 2020. The nearly 37.4 bsf set an all-time volume record.
Average week shipments increased 8.9 percent, from 7.802 bsf in 2019 to 8.499 bsf in 2020, which is the highest rate since July 2000, according to Dick Storat in his Scoring Boxes newsletter. Shipments of corrugated products are up 1.9 percent year-to-date.
Containerboard consumption increased 4.0 percent, from 2.9470 million tons in October of 2019 to 3.0635 million tons in October of 2020. Consumption is up 1.9 percent year-to-date over 2019, from 27.1498 million tons to 27.6535 million tons.
Containerboard inventory at corrugator plants decreased 6.9 percent, from 1.9511 million tons in September to 1.8156 million tons in October 2020. Weeks of supply also decreased, from 2.9 to 2.6 0r 10.3 percent.
“As mills ran hard to meet demand, inventories of liner and medium declined by 147,000 tons, the largest October drop in 13 years,” noted Storat. “At 2.18 million tons, inventories are now at the lowest level since November 2012. In the five months since May, containerboard inventories have dropped continuously by an amount reaching 20.3 percent at the end of October.”
AF&PA reported that containerboard mills ran at 98.1 percent capacity in October and medium mills ran at more than 100 percent of rated capacity during the same period. Kraft mills ran at 99.5 percent of capacity and recycled mills ran at 95.6 percent of capacity.
“A large share of the reason that box demand is holding up so strongly amid weak overall conditions is because of consumers’ increasing willingness to purchase goods online,” noted Storat. “However, the travel and shopping restrictions brought by the coronavirus pandemic accelerated purchases beyond anyone’s projections. Year-over- year growth since March has risen by between 20 and 30 percent.
“Currently, e-commerce accounts of 15.5 percent of all sales and has been rising at an average monthly rate of 3.2 percent since March, more than triple the growth rate of total sales since the pandemic has impacted our economy.” Storat wrote that imports of non-durable goods are still supplying most of the spending growth, as exports of packagable goods have declined.
