Sonoco cites OCC shortage for price hike in Europe

Earlier this month, Sonoco Products Co. announced plans to increase prices for all grades of its uncoated recycled paperboard (URB) and converted paperboard products in the United States and Canada, and now the Hartsville, South Carolina-based packaging company is making similar moves in Europe.

Effective April 7, Sonoco is implementing a 60-euro-per-metric-ton price increase for all grades of core board and paperboard in Europe, and company leadership points directly at old corrugated containers (OCC) supply as well as elevated energy costs.

“OCC generation has been low across Europe which has resulted in rising prices in March, and we expect additional increases in April and beyond,” says Adam Wood, vice president of Industrial Paper Products Europe at Sonoco. “This is compounded by OCC exports from Europe that continue to tighten local supply.”

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Wood says Sonoco was hopeful that as spring began, energy prices would come down in Europe to help offset material inflation, but that has not materialized.

“[A]nd with gas storage levels low across Europe, the need to replenish reserves over the summer is not likely to support a meaningful reduction,” he says. “We have held out to support our customers as long as we can but must now pass on these rising costs.”

Market factors also prompted Sonoco to hike URB and converted paperboard products in the U.S. and Canada in mid-March, with URB prices increasing $70 per ton, effective April 10, and converted paperboard products increasing by a minimum of 8 percent, effective April 15.

John Florence, general counsel, secretary, vice president and general manager of Industrial Paper Packaging North America at Sonoco at the time said the increase is “necessitated by continued inflation in input costs and tightening market conditions.”