According to a report by Michael Roxland, a senior paper and packaging analyst at Trust Securities, which was sent to investors on May 4th, International Paper, Georgia-Pacific Corporation and American Packaging Company have respectively announced an increase in the price of kraft paper. The new prices will come into effect on June 1st.
According to this memo, the announced increase amounts are as follows: International Paper will increase the price by $70 per ton, Georgia-Pacific will increase it by $50 per ton, and American Packaging will increase it by $50 per ton.
This is not over yet. In fact, as early as last week, Smo菲维实洛克 already fired the "first shot", announcing a 50-dollar increase in price per ton starting from June 1st. This means that the leading players in North America have reached some kind of consensus on this matter of price increase.
You should know that this is yet another strong push following the 70-dollar per ton price increase in March this year. In just one quarter, the cumulative increase has exceeded 100 dollars. Such frequency and intensity is truly rare in the market over the past few years.
At this point, some people might ask: Given the current complex global economic situation and the wavering consumer confidence, how could these giants have the confidence to collectively raise prices at this critical juncture?
According to these manufacturers, the reasons are all very similar: to offset the terrifyingly soaring input costs. Not only are raw materials increasing in price, but transportation costs, chemical raw materials, and the purchase costs of wood are also experiencing significant inflation. What's worse, geopolitical black swans are also disrupting the situation. Energy price fluctuations caused by conflicts in the Middle East are spreading like dominoes to the packaging industry.
Tony Smythe, the CEO of Smurfit Widrow, was quite straightforward during the earnings call: "To be honest, this price increase is necessary for our company and for the entire industry. It is inevitable."
In fact, analysts had previously disagreed on the timing of this round of price hikes. In the first quarter, due to the situation in the Middle East and the wavering consumer confidence, many people believed that the price increase might be postponed until the end of summer or even autumn.
However, the reality is that the recovery in market demand in March and early April exceeded expectations. Senior executives from major companies generally reported that although the first quarter was tough, the order pattern after March was very strong. American Packaging Company even predicted that this growth momentum would continue throughout 2026.
Apart from the rising demand, the "man-made reduction" on the supply side is the core strength that makes this round of price hikes truly valid. The latest data released by the American Forest and Paper Association gives one a shiver of fear: In the first quarter of 2026, the production of North American kraft paper plummeted by 8% year-on-year, marking the largest decline in many years.
The root cause of this situation lies in the fact that in 2025, the entire industry collectively announced an unprecedented capacity reduction plan, with the total capacity to be shut down accounting for nearly 10% of the total capacity at that time. And the last batch of shutdown operations actually occurred in the first quarter of 2026.
This has led to a very interesting phenomenon: on the one hand, demand is on the rise; on the other hand, supply is shrinking sharply. The CEO of International Paper, Andy Silvernail, directly refuted those who doubted the supply shortage at the meeting. He firmly believed that the current paper market is "indeed very tight", and the company is even facing a shortage of supply. This mismatch between supply and demand provides a perfect stage for paper mills to regain their pricing power.
However, during this intense price increase wave, a significant "war of words" also broke out between producers and market information agencies. The executives of the American Packaging Company openly expressed their dissatisfaction with the pricing mechanism of Fastmarkets RISI at the meeting.
It turned out that in the 70-dollar price increase announced in March, the index only confirmed the 50-dollar portion. This index failed to fully reflect the actual increase, causing the manufacturers to feel extremely frustrated. This actually also reflects that in the current market environment, there is a fierce competition between the actual market prices and the industry index. Every penny increase is a real battle of wits.
For those of us who are at the lower end of the supply chain or are closely monitoring the global supply chain, this June's price increase is more like a turning point. According to a post by Matt Reddington, Vice President of Procure Analytics' packaging business, June will mark "a major turning point in the pricing of hanging paper".
He pointed out that in the face of rising input costs, raising prices is one of the only ways for producers to recover their costs. "For buyers, this is likely to mark the beginning of a continuous upward pricing cycle," he said.
According to the plans of major paper industry giants, the benefits of the first round of price hikes will be fully reflected by July. And the benefits of this second round of price increase in June are expected to be fully incorporated into the financial reports by the end of September. International Paper even predicts that the pricing revenue alone will contribute 175 million US dollars to the company in the second half of 2026.
In the North American boxboard paper market in 2026, a drama of "capacity management" for "pricing leverage" is unfolding. Under the double pressure of high energy prices and geopolitical uncertainties, packaging giants no longer opt for low-price competition. Instead, they shift costs by collectively reducing supply. In this continuously rising pricing cycle, the one who can predict more accurately and make plans earlier will be the one who can preserve their profit pool in this cost storm.
