Three major box companies have nominated higher prices for June containerboard, citing sold-out conditions amid reduced production and uneven demand.
Leading up to the increase announcements, several companies built the case for higher pricing, pointing to an “unprecedented” shift in demand, higher energy and freight costs, low customer inventories and margin compression.
CEO Tony Smurfit confirmed in an April 30 investor call that UK-headquartered Smurfit Westrock had nominated an increase of $70/ton for June, while International Paper (IP) and Georgia-Pacific were reported as nominating $50/ton rises.
“Frankly speaking, we and the industry need it, so therefore it’s going to happen,” Smurfit said during the call.
In January-March, the industry saw a net $50/ton in containerboard price increases, which have not yet fully made their way into company earnings, the executives said.
Demand
First-quarter box demand was sluggish amid severe winter storms and cautious consumer spending, but in March and April demand soared.
Although there was no clear answer for the dramatic upswing, executives cited the delayed impact of capacity closures, amplified seasonality, low customer stocks and knock-on effects from the Iran war. They acknowledged that pre-buying in the face of price increases could have been a factor, but largely downplayed its significance.
Despite the overall optimism on 2026 demand, Smurfit said market conditions could still reverse course. “Now obviously, I can’t put my hand on my heart and say they’re not going to change quickly back again. But as we sit here today, I’ve never seen the speed of change so quickly.”
Net capacity loss
About 10% of North American containerboard production capacity has been shuttered over the past two years, with IP responsible for the biggest share.
The Memphis-based company has closed about 2 million tons of annual containerboard capacity in the past 18 months, including mills in Louisiana and Georgia.
However, IP expects to complete a $250 million conversion of the No. 16 containerboard machine at the Riverdale mill in Alabama by the end of the second quarter, bringing online about 1 million tons. Although the project will add capacity, the downtime from annual planned maintenance and the conversion has contributed to tightened supply, executives said during an April 30 investor call.
In addition, IP is acquiring the 1 million ton North Pacific Paper Company (Norpac) mill in Longview, Washington, in which two of the three paper machines produce recycled lightweight containerboard.
In 2025, Smurfit Westrock closed about 600,000 tons of high-cost or inefficient capacity, including its coated recycled board mill in St. Paul, Minnesota, and its containerboard mill in Forney, Texas.
Smurfit noted that significant industry capacity contraction previously was balanced by weak macroeconomic conditions in North America and Europe. He added that the March/April increase in demand brought to a head the plant closures and low customer inventories.
In addition, Packaging Corporation of America (PCA) closed a plant in Richmond, Virginia, and Greif shuttered several sites before selling its containerboard business to PCA.
Freight costs soar
One rapid effect of the Iran war has been higher diesel prices, which surface both in transportation costs for the companies’ products but also in costs for raw materials including OCC and chemicals.
“Rising freight costs are not passed through directly. They’re recovered through pricing over time,” said IP CEO Andy Silvernail.
Smurfit Westrock CFO Ken Bowles noted that the primary cost drivers tend to be energy, OCC, labor and freight, and “the one moving part, as you can imagine, is the energy piece.”
Silvernail noted that two years ago “a global trade war and bombing Iran [were not] on my bingo card.
“But that’s life. I get paid to deal with these realities.”
