Fiber, paper and carton moves after Q3 tariff relief

By Daniel Okafor

Cascades reported $4 million in Q3 tariff impacts within packaging, tied to corrugated boxes, molded pulp, plastic products and certain URB grades. The Trump administration updated tariff categories in late October, making corrugated boxes, plastic and molded pulp packaging products no longer subject to tariffs.

CEO Hugues Simon said on the company’s Nov. 6 earnings call that the update was “significantly reducing the expected financial impact on our results.” Cascades’ North American box shipments rose 5.3% year over year.

Packaging Corporation of America, Graphic Packaging International, International Paper and Smurfit Westrock also discussed price increases and the acute effects of tariff and fuel costs following Q3. Fiber-related themes across the other calls included business and leadership changes, volume trends and mill utilization.

Fiber costs and pricing moved in opposite directions

OCC prices continued to rise. Cascades reported that recycled fiber raw-material index prices rose 12% sequentially and 15% year over year for white grades. Brown grades increased 19% sequentially and 29% year over year.

Simon said: “As we approach 2027, despite ongoing inflationary pressures, market conditions in both packaging and tissue are evolving favorably, and recent price initiatives are expected to provide additional benefits next year as their full impact will be reflected in our results.”

Sappi’s North American packaging and specialty papers segment reported record-high volumes during fiscal fourth quarter. The South African packaging and paper company partly credited the commercial ramp-up of the No. 2 paper machine at Somerset Mill in Maine. Paperboard sales volumes rose 48% year over year, but profitability disappointed under pricing pressure and cost inflation.

Sappi focused on announced price increases, which it expects to realize in coming quarters. The market price of solid bleached sulfate rose $60 per ton during the quarter. Market price for SBS paperboard also rose $60 per ton. Sappi reported improving sentiment in the North American SBS market.

The company plans multiple outages at both the Somerset and Cloquet mills through its fiscal third quarter.

Greif’s fiber mills ran at approximately 95% operating rates in fiscal fourth quarter. Sales increased as April’s $60 per ton price increase for uncoated recycled paperboard flowed through. Gross profit fell because recognition of the June price increase was delayed.

Fiber volumes rose 1.3%, supported by “steady converting demand,” CEO Ole Rosgaard said on the company’s Nov. 4 earnings call. Polymers and metals moved against that trend, posting volume losses as the industrial sector remained challenged. Greif expects flat fiber volumes in fiscal 2027.

Mondi CEO Andrew King said on Oct. 15 that sack kraft had reached “in an almost unprecedented way, we’re onto our third price increase for the year.” He linked the increases to higher input costs and “new sources of demand there that is tightening things up.” King said the increases are “really a 2027 story at this stage because it’s too late to materially impact ’26.”

Cost pass-through on bags remains slightly delayed because some contracts operate on semiannual terms.

What does this change for packaging buyers?

The near-term answer is uneven. Cascades said the late-October category update would significantly reduce its expected financial impact. Sappi expects price increases in coming quarters, while Cascades and Mondi point to 2027. Supply signals also diverge: Sappi set record volumes, Greif’s fiber mills ran near 95%, and fiscal 2027 fiber volume is expected to remain flat at Greif.

Cascades CFO Allan Hogg will retire in the second half of 2027 after 16 years in the role and 36 years with the company. His departure sets in motion a search for a successor.

Elopak’s new CEO, Håkon Volldal, took the helm Nov. 2. The Norwegian carton maker reported Americas revenues increased 5.9% in Q3, “despite growth being constrained by the board supply disruption following the Nippon Dynawave incident,” the company said. It added: “Insurance recoveries recognized in the quarter partly compensated for the additional costs, with further recoveries expected.”

On Nov. 6, Tennessee-based specialty papers maker Sylvamo announced it is selling its Europe business to a private equity group. The deal includes mills in France and Sweden.

For packaging buyers, the watchpoint is timing. Cascades and Mondi point to price benefits in 2027, while Sappi expects nearer-term realization and Greif reported delayed recognition of its June increase.