November 2, 2026
Big paper producers have for months highlighted tightness in the balance between containerboard supply and demand. “Market conditions for practically all paper grades remain as tight as I can remember,” Smurfit Westrock CEO Tony Smurfit said on July 29.
Yet industry data so far offer little support for that view. Mill operating rates were 93% in June and averaged 94.9% in Q2, while industry inventories ended the quarter at 3.9 weeks of supply—metrics that don’t indicate a lack of slack in the system.
That doesn’t mean major producers aren’t experiencing tightness. They’re said to be buying containerboard on the outside market, adding demand to an already smaller pool of available tons. The temporary curtailment of International Paper’s Pine Hill mill following storm damage removed roughly 70,000 tons a month of production at a time when the industry was recovering from a disruptive maintenance season earlier in the year.
Permanent capacity cuts have further trimmed supply. Nearly 10% of North American containerboard capacity was removed in 2025 alone. Maintenance has added another wrinkle. At the Jefferies Global Industrials Conference on Sept. 10, Packaging Corp. of America said one containerboard mill was down and three others were scheduled for maintenance in Q4.
International Paper’s shutdown of higher-cost assets changed its supply position and, given the company’s size, affected the broader industry, CEO Andy Silvernail said. “We’ve gone from, as you know, from being very long in terms of our paper position two, 2.5 years ago, to being modestly short in our paper position because of the capacity.”
“And so it is tight, and I expect it will be tight,” he added. “And I think that’s a good thing because I think the industry—
each company on their own, having the discipline to make money, is very important.”
Packaging Corp. is in a similar position but for a different reason. Rapid growth has contributed to the company’s short paper position, even after last year’s acquisition of Greif’s containerboard assets and corrugated operations.
“We continue to see very tight containerboard market conditions, and we’re in a much better inventory position than we were coming out of Q2,” CEO Mark Kowlzan said.
Packaging Corp. ran its mill system without major maintenance interruptions in July and August, allowing the company to rebuild inventories following Q2 outages. Yet management continued to describe available supply in stark terms.
“You cannot go out on the market and buy tons,” Kowlzan said. “We’re running full. If I had to come up
with another ton, I don’t know where I’m going to come with another ton
of containerboard.”
Buyers have offered some support for the tightness narrative, particularly when it comes to late deliveries or difficulty sourcing specific grades and sizes, though several reported an apparent easing in recent weeks.
“All of the medium I had on order from the summer came crashing in all at once, and now my warehouse is full and mills are calling asking where October orders are,” one independent buyer said.
The response to Canadian tariffs offers another window into available supply. Ahead of tariffs of as much as 50% taking effect September 8, reports indicated that several integrated producers placed emergency orders to build inventory in warehouses on the Canadian side of the border. Some of those orders represented as much as four weeks of supply for Canadian customers. However, no difficulties were reported in sourcing containerboard for these expedited orders.
A producer can be short of paper without a broader market shortage. Specific grades and sizes might be
short of supply or difficult to obtain even when aggregate inventories
remain adequate. Maintenance
outages can temporarily constrain individual mill systems. And a producer running full can see the market very differently than an independent buyer being called by mills looking for October orders.
The real question, then, is how much of today’s tightness reflects a genuine industrywide shortage and how much stems from the tension created by colliding price increases, tariffs, maintenance outages, and company-specific capacity decisions—all against underlying box demand that looks simultaneously resilient and fragile?
Ryan Fox is a corrugated market analyst at Green Markets, a Bloomberg company. He can be reached at rfox93@bloomberg.net.
