Tense situation in the carton packaging industry

16, November, 2021

ASPACK cardboard packaging

The cardboard and cardboard container is currently characterized by a very tense situation, as affirmed by the Spanish Association of Cardboard Container and Packaging Manufacturers, ASPACK

Carton and carton lead times have recently been extended to an unprecedented degree. The price structure has moved noticeably upward in the same way. Therefore, the advance planning of future demands and sufficient lead time for new projects by customers in the carton industry is at unusual times.

Shortage of raw materials and logistical problems

According to industry experts, there are several reasons why the otherwise stable supply chain for consumer cartons is currently experiencing fluctuations.

On the one hand, domestic demand virgin fiber cardboard in Asia and North America, as well as interruptions in international logistics and the exorbitant increase in transport costs in global freight traffic, are responsible for the estimated shortage of 300.000 t of virgin fiber cardboard in the European market of conversion.

On the other hand, on the side of the recycled carton, a lower volume of recovered paper related to Covid, which has already been widely covered in the media, did not meet the increased demand for many types of recovered paper-based packaging.

The order book in the cardboard mills is growing, leading to a significant increase in delivery times. While lead times for orders remained at an average and customary level of 4-8 weeks in 2020, depending on the grade of the carton, it increased to 10-20 weeks during the summer, and even longer for special grades.

According to the report by the British consultancy NOA Prism, which presented the European Carton Prospects Report 2021 On behalf of the European Folding Carton Association ECMA, the consultancy estimates an exorbitant increase in the volume of cardboard orders of 10,9% for European markets in 2021 compared to the previous year. with a forecast of a simultaneous increase in the volume of carton packs of 3,7%.

The aforementioned extended delivery times find their analogy in various price increases made for carton and others that are already advertised. The same applies to other raw materials and supplies for the production of cartons, as well as, for example, for pallets or transport packaging, which have a huge impact on the cost situation of carton manufacturers.

In the current situation, Jose Ramon BenitoPresident of ASPACK and Managing Director of the Docuworld Group, believes that realistic customer forecasts are very important: “In the current market situation, good planning of the order book is essential. Panic and trying to secure purchases lead to additional shortages and are counterproductive. Therefore, clients are advised to plan ahead, especially for new projects, to avoid further distortions. At the same time, it is essential that the increases that are taking place this year in the costs of energy, transport and other materials, as well as the increases in cardboard prices and those announced for 2022, respond to real expectations. and they are done intelligently so that they can be appropriately moved along the value chain ”.

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