Containerboard Production Fell 1.6% in Q3 as Export Drop Accelerated

North American containerboard production fell 1.6% year over year in the third quarter, the American Forest & Paper Association reported Friday, marking the second consecutive quarter in which the rate of decline slowed. Production rose 2.7% from the second quarter, according to the association's data, cited in a Nov. 1 memo from Michael Roxland, senior paper and packaging analyst at Truist Securities.

The year-over-year decline follows industry closures that removed nearly 10% of North American production capacity in 2025. In Q2 2026, containerboard production fell more than 2% year over year, a sequential improvement from the 8% decline recorded in the first quarter.

What do the operating rates signal?

The containerboard industry's overall operating rate stayed above 94.5% in Q3 for the second consecutive quarter. Year-to-date operating rates now sit 2.5 points higher than in 2025, according to AF&PA. For mills still running, the figure points to tighter supply conditions created largely by capacity exits rather than demand growth.

The export picture weakened. Q3 exports declined nearly 23% year over year and 11% from Q2. That drop accelerated from the 19% year-over-year fall AF&PA charted in the second quarter, when the association linked the production decline to reduced exports. Imports, by contrast, increased 25% from Q2.

On the boxboard side, AF&PA showed production up nearly 1% year over year in Q3, while the industry operating rate fell 1.5 points to 88.3%.

How did box shipments perform?

Fibre Box Association data, also released Friday, showed quarterly box shipments dropped 1.6% year over year, Roxland noted. The figure aligns with what Packaging Corporation of America and International Paper reported in their October Q3 earnings: year-over-year box volume declines of 0.5% and 2%, respectively.

Analysts tracking the sector confirmed the soft quarter. "The third quarter didn't go as well as we hoped," said Ryan Fox, corrugated packaging market analyst at Bloomberg Intelligence, during a session Thursday at the Paper and Plastics Recycling Conference in Chicago.

Why did the FBA change its reporting?

Fox also addressed a revision to how the FBA reports its data, made last quarter. "To me, it solved a lot of problems that I saw in the data. It helped us understand that volume — the billions of square feet of boxes — was vastly more than we had known, while the tonnage really didn't change," Fox said.

For packaging buyers and brand supply chain teams, the combination of sub-2% shipment declines and operating rates above 94.5% suggests the market is tightening from the supply side even as box demand stays roughly flat. If capacity stays offline and exports keep falling at the current pace, pricing leverage in coming quarters will hinge more on mill closures than on any recovery in shipment volumes.