After a year marked by mill closures, trade uncertainty and persistent global overcapacity, the pulp, paper and forest products sector enters 2026 facing a new phase of adjustment. In its latest market outlook, ResourceWise identifies seven key issues expected to shape industry conditions in the year ahead.
Based on developments observed throughout 2025 (including tariff measures, margin pressure and intensifying international competition), the analysis points to a business environment where competitiveness, supply-chain accountability, carbon value and capital discipline will increasingly influence strategic decisions.
1) Supply-chain transparency continues to deepen
Despite delays in parts of the European regulatory agenda, ResourceWise expects momentum toward greater supply-chain transparency to continue in 2026.
Certification bodies are likely to face closer scrutiny regarding the credibility of sustainability claims, while large brand owners and retailers are expected to expand voluntary traceability and verification programs. These initiatives are expected to shift additional reporting and compliance requirements upstream across the value chain.
2) Chinese overcapacity reshapes global trade and pricing
Chinese pulp and paper overcapacity remains a central factor influencing global markets.
According to ResourceWise, continued export pressure from China is likely to:
- weigh on global price levels,
- erode margins for trade-exposed Western producers,
- and trigger further protectionist or anti-dumping measures in regions with significant domestic production, including Europe, India and potentially Brazil.
The firm also notes that extreme competition could strain parts of China’s industry, increasing the likelihood of targeted state intervention.
3) Carbon value becomes a source of opportunity — and tension
As carbon-related technologies and products advance, questions surrounding ownership, valuation and verification of carbon benefits are expected to intensify.
Key areas highlighted include:
- carbon capture and storage projects at pulp mills,
- expanded production of tall oil and biofuels,
- and rising ESG measurement and reporting requirements.
Because a growing share of value creation is linked to carbon performance, ResourceWise anticipates tension over where carbon value is generated and how — and when — it should be recognized.
4) Financial pressure accelerates consolidation and restructuring
Persistent margin pressure, rising capital costs and increasing investment requirements are expected to drive further consolidation across parts of the forest value chain.
ResourceWise suggests that some publicly listed companies may pursue mergers, privatization or asset sales as a means of strengthening balance sheets. Firms whose market valuations sit well below asset replacement cost — but operate competitive mills — are viewed as particularly attractive acquisition targets.
5) Lumber markets remain under pressure until capacity exits
The North American lumber sector is expected to remain challenged in 2026.
ResourceWise estimates that between one and two billion board feet of capacity may need to exit the market before supply and demand rebalance and pricing shows sustained improvement.
6) Containerboard tightens, while paperboard remains challenged
Packaging grades are expected to follow diverging paths over the course of the year.
ResourceWise anticipates:
- a gradual tightening of North American containerboard markets in the second half of 2026, assuming resilient U.S. consumer demand,
- while paperboard markets remain under pressure, weighed down by recent capacity additions and an unfavourable global supply-demand balance.
A tighter containerboard environment could eventually support renewed capital investment, the outlook suggests.
7) Latin American buyers gain an edge in U.S. asset acquisitions
International interest in U.S. forest-products assets is expected to remain strong, but the competitive landscape among buyers may shift.
While European operators may face constraints linked to weaker balance sheets, ResourceWise sees Latin American companies as better positioned to pursue acquisitions and expand their presence in the U.S. market.
For ResourceWise, 2026 represents a pivotal year in which trade dynamics, capacity rationalization, carbon-related value creation and capital discipline will continue to reshape the global pulp, paper and forest products industry.
Source: ResourceWise
