Germany: Concerns about increased prices of corrugated cardboard

Are this year’s changes in the paper market responsible for a disaster in the paper industry? “According to the analysts and market watchers: Yes,” states a worried Oliver Wolfrum, Managing Director of the German Association of Corrugated Cardboard Industry (Verbandes der Wellpappen-Industrie, VDW). Some VDW association members are teetering on the edge. The industry does not only struggle with the scarcity of source materials, which leads to bottlenecks, but they also have to cope with the extreme increase in the costs of material for corrugated cardboard in 2017.

Since the beginning of 2017 the price of recycled paper has increased by about 100 Euros per metric ton and the increase in price of kraftliner is currently around 150 Euros per metric ton. "The full extent of this dramatic development becomes clearly visible when you realize that the share of the paper price in the industry's total production costs is about 50%. As a result, a price increase of our corrugated cardboard products of roughly 14% on average would be necessary, just to compensate for the increase in material costs,” summarizes Wolfrum.

Looking to the future, the industry does not expect the situation to improve. The extreme material shortage, especially for kraftliner, as well as the developments on the cost side will continue to have significant effects on the current situation. And in the beginning of 2018, the expected relaxation of the existing import restrictions of waste paper on the Chinese markets will lead to an immense demand for recycled paper in Germany and Europe. This could push up the prices of recycled paper and the packaging produced from these materials even further.

For more information: www.wellpappen-industrie.de