Containerboard Demand Drop Cuts Output, Capacity

By Tom Stundza

The economic slowdown has continued to reduce demand for linerboard and slowed manufacturing at North American containerboard facilities. At the same time, U.S. capacity to produce paper and board moved down slightly in 2008 to 96.3 million tons -- continuing an eight-year fall, according to the American Forest & Paper Association's annual survey.

Capacity is expected to drop by about 2% in 2009 to 94.5 million tons, which will be well off the peak of nearly 104 million tons in 2000. In 2008, 41 paper machines as well as 18 entire mills were shut permanently, the AF&PA survey reveals. The capacity to make paperboard for boxes is expected to decline at least 2.6% from 2007 to 2009, according to RISI, the Bedford, Mass.-based forest products information service.

Meanwhile, Smurfit-Stone Container Corp., the largest producer of cardboard box materials in North America, is closing a mill in Missoula, Mont., for 10 days from April 20 due to shrinking demand for cardboard products. The plant already has had another linerboard machine shut since last November.

A RISI market review says that over the past six months, North American containerboard companies have taken downtime of some 2.15 million tons, or 32.5%, of annual linerboard capacity.

The researchers also say that companies have temporarily stopped production of 719,000 tons, or 28.1% of capacity, of corrugating medium volume in the fourth quarter of last year and first quarter of 2009. Some 31.3% of recycled containerboard capacity, or 2.87 million tons, also saw some downtime. RISI tells clients that these tonnages reflect “known downtime” reported by local media or released in company statements.