The Leading Companies in The Korean Corrugated Paper Industry Have Collectively Raised Prices By 25%, And Small And Medium-sized Cardboard Factories Are Queuing Up To Go Bankrupt.

In the complex backdrop of global economic recovery and fluctuations, the cardboard packaging industry, which was originally regarded as the "unsung hero" of the manufacturing sector, is now facing an unprecedented survival crisis. Recently, a major announcement came from the Korean paper industry: The suppliers of the key raw material for cardboard packaging, "1G" corrugated paper, have once again collectively raised prices within less than two years since the last price increase took effect. This move not only shattered the market's illusion of stabilizing costs, but also pushed the packaging processing enterprises at the downstream end of the industry to the brink of disaster.
This price increase wave is not groundless. It is actually a "forced counterattack" by the paper industry giants after their profits have continued to decline and their survival space has been severely compressed to the extreme. For these enterprises at the top of the supply chain, the long-term erosion of profits has reached an intolerable critical point. If the price adjustment in 2024 was to cope with the aftermath of the post-pandemic era, then this round of aggressive price hikes at the beginning of 2026 is a life-and-death performance defense battle.
The major players have joined forces, and the price increase is astonishing.
According to the latest industry research data, from December 2025 to January 2026, the key players in the Korean paper industry have completed a new round of price hikes. Talin Paper and Jeonju Paper took the lead and implemented a price increase for 1G corrugated paper. Subsequently, the Korean Export Packaging Company also followed suit in mid-January 2026 and officially implemented the price increase plan. As the industry trendsetter, Yajin Paper did not miss out either. It has already completed the price adjustment for some products and is now actively working on the subsequent phased price increase plan.
What further unsettles downstream enterprises is that the price increase has exceeded expectations. According to the information disclosed by various suppliers, the increase rate for this round is generally in the high range of 10% to 25%. At the same time, as the benchmark for corrugated paper prices, Asia Paper, as well as key companies such as Xin Dabao Paper and Sanbao Paper, are also closely monitoring market trends and coordinating the price increase schedules of their sales departments. Even Han Song Paper, which has been mired in rumors of sales and internally experiencing turmoil, could not withstand the cost pressure and issued a heavy price increase notice to its customers. This collective action across the entire industry and among various enterprises indicates that the era of low prices for paper raw materials has completely come to an end.
Cost黑洞, The Invisible Killer That Devours Profits
Looking back at the financial reports of the past few years, the financial situation of the paper industry has been truly alarming. Take Taelin Paper Industry as an example. Its net profit in 2022 remained at a considerable level of 81.6 billion won, but by 2024, this figure had been slashed in half, shrinking to 41.8 billion won.
The situation of the Korean Export Packaging Company was even more dire. Its net profit for 2024 was only around 3.2 billion won, a decrease of 84% compared to 2022's 20 billion won. Chunjae Paper Industry suffered losses of over 30 billion won for two consecutive years. Although a few companies such as Asian Paper could still maintain profits, the continuous decline in profit margins is an undeniable fact.
To explore the underlying reasons, the drastic fluctuations in raw material costs are the primary culprit. The main components of 1G corrugated paper - imported pulp and recycled waste paper - have long been subject to the repeated fluctuations in global macroeconomics and exchange rates. Taking SBHK (American Southern Bleached Hardwood Pulp) as an example, its unit price rose from $665 per ton at the beginning of 2025 to $700 at the beginning of 2026.
Although it has declined from the historical peak of $895 in mid-2024, the persistently high cost structure has completely undermined the profit model of the paper manufacturing enterprises. Moreover, the continuous rise in labor costs and the deterioration of fixed operating costs in factories have made paper manufacturers realize that even if sales recover, they cannot cover the expanding expenses through scale effects.
The lament from the downstream sector, the life-and-death ordeal of medium and small-scale manufacturers
When the upstream raw material suppliers successfully shifted the cost pressure by raising prices, the pressure hit the downstream processors like a heavy hammer, causing severe damage. These small and medium-sized corrugated paperboard processing enterprises are responsible for receiving 1G corrugated paper and processing it into finished products such as logistics express boxes and electronic product packaging boxes. They are in the most awkward middle position of the entire value chain: the upstream is the powerful raw material suppliers, and the downstream are the large retailers and electronic manufacturing giants with strong bargaining power.
Since packaging manufacturers usually sign long-term supply contracts with large customers, these contracts often lack flexible price linkage clauses. This means that even if the cost of raw materials suddenly increases by 25% overnight, the manufacturer cannot immediately raise the price of the finished products.
In this "double victim" predicament, the profit margins of small and medium-sized manufacturers have been rapidly eroded. For many small factories, each price adjustment notice sent out could mean the loss of orders. Not raising prices would mean that every inch of cardboard is being produced at a loss. This cost inversion phenomenon is highly likely to trigger a wave of bankruptcies and mergers at the industry's bottom.
The cold reception from the capital market and the structural predicament
Ironically, while the paper-making enterprises in the real economy were struggling on the verge of survival, the capital market exhibited a strange divergence. Although the Korean Composite Stock Price Index (KOSPI) soared during the bull market and once reached the 5,000-point mark, the stocks related to corrugated paper seemed like orphans forgotten by the times, lingering near historical lows for a long time. The sensitivity of capital is the most acute. The persistent slump in stock prices truly reflects the deep concerns of investors about the industry's declining revenue and fragile profit model.
Industry experts have pointed out that the current predicament is not merely a cyclical price fluctuation, but rather a concentrated outbreak of structural contradictions within the industry. Over the past few years, even during periods when market demand was still acceptable, the listed companies related to the paper industry failed to deliver satisfactory results. This double blow of poor performance and poor stock prices has made these enterprises face severe financing difficulties when they are confronted with the next round of industrial upgrading or technological transformation.
Where is the way? Establish an ecological system where costs are shared.
Facing the almost uncontrollable cost pressure and the increasingly fragile supply chain, the industry insiders have begun to call for profound changes. The only way out might lie in establishing a more resilient "supply-demand-price linkage mechanism". In simple terms, the fluctuations of raw materials from the upstream cannot be borne entirely by the midstream processors. Instead, a transparent and automatic cost transmission path needs to be established, allowing the final consumers or large retailers to also participate in the cost sharing.
Furthermore, industry consolidation and supply-side structural reform are urgently needed. Currently, the corrugated paper industry still faces problems of overcapacity and low technological content. Comprehensive strengthening of industry infrastructure construction and enhancing the R&D capabilities of high-value-added specialty papers are the necessary steps to break free from the "price war" quagmire.
This price shock wave triggered by "1G" corrugated paper is a severe test for the global packaging supply chain. It reminds every practitioner that in the era of constant cost fluctuations, the defensive strategy of going it alone has become ineffective. Only through in-depth collaboration between upstream and downstream and innovative mechanisms can one preserve that precious profit foundation in the turbulent market environment.