Price Forecast: Corrugated Boxes

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  • Tags : Packaging & Printing | Corrugated Boxes | Price trend | Price forecast | Procurement research | Category market forecast

Recent Price Trend - Corrugated Boxes


Prices for corrugated boxes have increased at an estimated annualized rate of 3.2% in the three years to 2017, hurting buyer power. While rising demand has afforded suppliers the leverage to raise prices, a $50.00 per ton price hike has largely been responsible for the price increase. The top suppliers of corrugated boxes typically institute $50.00 per ton price hikes every two to three years, and the latest increase, which hit the market in early 2017, was overdue. The ensuing 5.8% rise in prices has contributed to a moderate level of price volatility during the recent three-year period, creating some budgeting difficulty for buyers.

While leading suppliers have increased their prices because of an overdue price hike, rising demand for corrugated boxes has allowed them to do so. Sales have grown in line with increases in construction, mining and manufacturing activity because corrugated boxes are often used as shipping containers for various industrial goods due to their durability and low cost. Additionally, from 2014 to 2017, consumer spending has increased as a result of rising consumer confidence and a dip in the unemployment rate, which have fueled growth in demand for corrugated boxes used to transport various consumer goods. Population growth has also boosted demand for market products to transport food items. Overall, rising demand has provided the foundation for leading suppliers to raise their prices.

On the input side, declining paper costs, falling wage costs and significant market competition have kept price growth suppressed. The price of paper has fallen in the three years to 2017, reducing the overall cost of production for suppliers of corrugated boxes. Moreover, suppliers have been able to cut wage costs by investing in automation technology, thereby reducing their reliance on low-skill labor. Shrinking wage costs have allowed suppliers to boost profit margins in a climate of rising sales. Furthermore, substantial market competition has played in the favor of buyers because it has forced vendors to curb price growth and avoid being undercut by lower-price offerings from other vendors.

 



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