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Investing.com - Citi expects July benchmark kraftliner prices to remain unchanged at $945 per ton when figures are released Friday after market close, according to a recent analyst note. This stability comes as industry analysts track the sector’s performance using comprehensive data and insights available through InvestingPro, which offers detailed analysis of over 1,400 US equities and their market dynamics.
The investment bank notes that earlier reports of recycled grade discounting appear to have subsided over the summer months. Only 15% of Pulp & Paper Week survey respondents reported discounting of recycled linerboard and corrugated medium in June’s survey, down from 30% in May.
North American producers have demonstrated supply discipline through market downtime and mill closures, with Cascades’ (TSX:CAS) Niagara Falls closure announced last week marking the fourth major shutdown this year. These four shutdowns will remove approximately 6% of North American capacity and likely stabilize industry operating rates in the low-to-mid 90% range. According to InvestingPro data, such strategic decisions are crucial for maintaining industry health and profitability in the current market environment.
Demand trends for June and early July appear mixed, with old corrugated container (OCC) prices at approximately two-year lows suggesting activity isn’t particularly strong. Mill backlogs are estimated around 3-4 weeks, and Citi expects Fibre Box Association (FBA) data later this month to show low-single-digit year-over-year volume growth in June, off an easy comparison.
U.S. kraftliner export prices to Mexico and Latin America, which represent 59% of U.S. export shipments, were flat in July. Year-to-date export shipments of kraftliner are down 12% compared to last year, with shipments to China down 58%, making China now the fourth most common destination for U.S. exports behind Mexico, Ecuador, and Canada. For deeper insights into global trade patterns and their impact on paper industry stocks, investors can access exclusive analysis and real-time market data through InvestingPro’s comprehensive research platform.
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