Over the course of the year, Greif reported its paper packaging and services division saw $2.3 billion in sales, up 2% year over year. | Pitipat Wongprasit/Shutterstock
Paper packaging giant Greif is the latest containerboard producer to announce a price hike for the recycled fiber end product at the beginning of 2025, employing a tool the company has used throughout this year to offset higher OCC feedstock costs and account for other cost growth. print pack
Ohio-headquartered Greif produces containerboard and other corrugated packaging products, as well as recycled paperboard. In a Dec. 5 call with investors, Chief Financial Officer Larry Hilsheimer noted that the company is in the process of rolling out a per ton containerboard price increase of $70 on linerboard and $100 on medium – the wavy internal layer of containerboard – set to take effect Jan. 1.
“Obviously, the demand dynamics in that space are very strong right now and we believe supports that price increase,” he said.
Other companies including Packaging Corporation of America , International Paper, Georgia-Pacific and Smurfit Westrock , have also announced plans for price hikes to start at the beginning of 2025.
Throughout most of 2024, OCC costs were elevated, starting the year trading for an average $87 per ton, more than double its price at the beginning of 2023, according to RecyclingMarkets.net. The grade climbed to $108 by June and July 2024, before beginning to fall back down. As of November, OCC averaged $77 per ton.
Increases in prices for raw materials, including OCC, cut into Greif’s paper packaging division profit, which decreased by 22% year over year, the company reported in its 2024 fiscal year earnings report covering the 12 months that ended Oct. 31.
But the profit dynamic stabilized by the fourth quarter, which ran from August through October. The company had increased recycled paperboard prices in July, and OCC prices began to taper off in September. For the fourth quarter, Greif reported $118.7 million in gross profit, nearly flat on the year.
Over the course of the year, the company reported its paper packaging and services division saw $2.3 billion in sales, up 2% year over year, which the company attributed to “higher average selling prices as a result of higher published containerboard and boxboard prices.”
Beyond the price and cost of its products, Hilsheimer said the underlying demand for Greif’s paper packaging products remains “mixed.”
“Containerboard and corrugated volumes are solid and operating rates of 90-plus percent,” Hilsheimer said. But the company’s sales volumes for recycled paperboard tubes and cores, which are used as the durable center of rolled products, have “continued to lag due to soft paper core demand,” he said. “This is driven by the overall boxboard industry, which is generally less positive than containerboard.”
While Greif and other paper firms are free to set their own prices for non-contractual sales, their contract sales pricing is typically set by price indexes, primarily Fastmarkets RISI . In its latest call, Greif noted RISI recently hiked finished product prices, which, combined with the recent decline in OCC prices, will benefit the company to the tune of an estimated $83 million.
Greif also reorganized its business into new divisions in its latest earnings report, which are separated by material type rather than market type. The divisions are sustainable fiber solutions, customized polymer solutions, durable metal solutions and integrated solutions.
“Making steel drums is very different from making polymer drums, which is again different from making small plastics or tube and cores,” CEO Ole Rosgaard told investment analysts on the call. “So aligning operations by material solution greatly enhances our ability to leverage our five distinct competitive advantages.”
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A former Mars Wrigley employee who managed on-site recycling programs at a production facility will serve prison time after he admitted to stealing more than $1 million in recycled commodity revenues.
Maine approved rules for its extended producer responsibility law for packaging, three years after becoming the first state to pass packaging EPR.
Oregon moved its rulemaking process ahead for its extended producer responsibility for packaging law set to roll out next summer, and Circular Action Alliance also released its third program plan draft.
As the January inauguration approaches – and with it the prospect of hefty tariffs on Mexico and Canada – market participants and industry analysts said any potential effects on recycled paper and containerboard markets would largely be indirect.
Average commodity prices rose slightly in the third quarter of the year due to national and regional trends, though the growth appears to be cooling off, according to the latest report from the Northeast Recycling Council.
Prices for most major curbside recyclables dropped this month, but a couple outliers were natural HDPE and aluminum beverage cans, both of which saw double-digit percentage increases in value. The national average price of post-consumer natural HDPE from curbside collection programs is now at an average 66.19 cents per pound, up 13% from 58.56 cents last month. One year ago, this grade was trading for 29.06 cents. But the national average price of color HDPE is down again this month, now at an average 5.44 cents per pound compared to 8 cents last month and 18.31 cents one year ago. The national average price of post-consumer PET beverage bottles and jars dropped this month, now averaging 15.41 cents per pound compared to 17.22 cents per pound this time last month. Regional contracts are now yielding 15-18 cents per pound. One year ago this grade was trading at an average 11.03 cents per pound. The national average price of post-consumer PP remains steady, now at 9.06 cents per pound, compared to 9.56 cents last month. PP was 4.94 cents one year ago. All major fiber grades dropped in value this month. The national average price for old corrugated containers, PS 11, dropped from $77 to an average $73 per ton. OCC averaged $80 per ton this time last year. Mixed paper, PS 54, dropped $4, from $45 to $41 per ton. This compares to $38 per ton this time last year. Sorted office papers, PS 37, remained steady month-over-month at $117 per ton, compared to an average $132 per ton one year ago. Sorted residential papers, PS 56, remain steady in the $63-per-ton range. This compares to $77 per ton one year ago. The national average price for sorted, baled aluminum cans is up, now trading at 86.88 cents per pound, up from 78.75 last month. It was 61 cents per pound this time last year. The price for sorted, baled steel cans is up, trading in the $174-per-ton range. Steel cans averaged $210 per ton one year ago. The national average price of Grade A film is unchanged at 18.13 cents per pound. It traded at 13.88 cents one year ago. Grade B film also remains steady at 7.63 cents. Grade C film is at a nominal 0.63 cents per pound. These prices are as reported on the Secondary Materials Pricing Index. This pricing represents what is being paid for post-consumer recyclable materials in a sorted, baled format, picked up at most major recycling centers. For a free trial to SMP’s Online Post-Consumer Pricing Index, visit the Recycling Markets website, recyclingmarkets.net. You can also contact Christina Boulanger-Bosley at [email protected] or call 330-956-8911.
AMP recently raised $91 million in a financing round and plans to use the funds to accelerate the deployment of its AMP ONE sortation system.
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