Citi notes that according to media reports, Packaging Corp. (PKG) has announced a $70/ton linerboard price increase and $90/ton medium price increase effective January 1, 2025. This follows the firm’s expectation for a 3rd price hike for 2024 announced around Thanksgiving, for implementation in Q1 2025. Notably, Packaging Corp. announced a price hike last year around this time. It’s not clear to Citi whether other major producers like Smurfit Westrock (SW) have followed the hike; Cascades (CADNF) announced a 3rd hike in September that ultimately was not followed by competitors. The firm expects Packaging Corp.’s hike will be followed, but awaits confirmation. Citi views the price hike announcement as positive for the Containerboard group, which is benefiting from consolidation, normalizing demand, and increased supply discipline.
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