The North American containerboard sector spent much of 2025 navigating a challenging environment shaped by weaker demand, capacity reductions, and shifting trade dynamics.
As the year draws to a close, the market appears more stable—leaner and more disciplined, yet still adjusting to slower consumption and global uncertainty.
Production and Capacity Adjustments
According to the American Forest & Paper Association (AF&PA), total containerboard production in the third quarter of 2025 declined 3.1% compared with the same period in 2024, bringing year-to-date output down 3%. In response to softer demand, producers reduced capacity by roughly 10% year-over-year—the steepest contraction in recent years.
These actions improved operating rates across all major grades in the third quarter, though year-to-date rates remained largely unchanged from 2024. The data reflect a sector working to restore balance between supply and more measured order volumes.
Inventory and Supply Chain Trends
Inventory control emerged as a central theme in 2025. U.S. mill inventories peaked in August at about 462,000 short tons—the highest level in more than a year—before declining 8% in September. This pullback indicates that mills are deliberately moderating production to prevent oversupply and stabilize prices.
Domestic new supply was essentially flat in the third quarter compared with the first, signaling improvement after a weak second quarter and suggesting the destocking cycle may be nearing an end.
Demand and Outlook
E-commerce packaging remained a steady source of demand, while retail and manufacturing activity showed early signs of recovery. Still, total shipment volumes lingered near decade-low levels, as the industry continued to absorb the aftereffects of pandemic-era overstocking and restrained consumer spending.
Market analysts anticipate a gradual recovery through 2026 and 2027 as inventories tighten and trade conditions improve. A leaner operating base and renewed supply discipline are expected to support more sustainable growth over the medium term.
A Transitional Year
In summary, 2025 has been a transitional year for North American containerboard producers—defined by corrective measures, cost discipline, and cautious optimism. Whether these adjustments translate into lasting stability remains to be seen, but the industry exits the year better aligned with current demand realities and positioned for a more balanced market ahead.
