European White Top Containerboard Markets – An Overview

The European containerboard market continued to grow in 2010, as it had from the middle of 2009 – this was as a result of healthy industrial production as well as reduced containerboard inventory levels. White top liner is one of the rising stars in recent years, mainly due to higher print quality demands on corrugated boxes and the increased usage of shelf-ready packaging.

In 2009, white top kraft and test liners both grew at a greater rate than other segments, but in 2010, white top test liner gained market share from white top kraft due to continuing growth from corrugated boxes and reduced production capacity of white top kraft. Competition for white top kraft has grown dramatically over the years, with supply increasing by nearly 8% every year from 2002 to 2010. In contrast, white top kraft production has reduced as suppliers have switched production to other, more profitable segments.

Over the last 10 years, there have been no unbleached kraft liner mill closures in Western Europe, however, production capacity for white top kraft liner has reduced by 0.5% p.a from 2005 to 2009, as those same machines have been utilised for other grades as demand increased. This resulted in higher prices and restricted supply.

In 2010, two major mills is Russia were rebuilt, which created a shortfall in supply and consequently prices increased – these factors contributed to an increase in demand for brown liners.

It seems clear that the white top segment generates more favourable profit margins than the brown segments, what isn’t so clear cut is how long growth in consumption will continue.

Posted Date: 23rd Dec 2011