Mill group Smurfit Kappa has said that it would expect that the price of its cardboard and paper packaging will drop following a reduction in the price it pays for waste paper.
In a conference call with investors, following the publication of its results for the first nine months of the financial year, Smurfit Kappa chief executive Tony Smurfit said that it wouldn’t increase prices and may actually reduce prices for paper packaging.
He said that prices had risen for finished goods on the back of increased costs for waste paper, gas prices and other costs such as distribution and logistics. But with the price of recovered fibre halving and a drop in gas prices, then price rises were unlikely.
Smurfit added: “In that environment, it’s very difficult to see price increases going forward.
“The question is will some of that be given back to the market and I think the reality is you would expect some of it is going to be given back to the market.”
In the trading update Smurfit Kappa said that profit for the full year is likely to increase by 33% to €2.3 billion (£2 billion).
However, volumes of product sold in the third quarter were down 3%, which it said was due to inflation, the continuing war in Ukraine and consumers moving away from durable goods to service spending after Covid lockdowns.
Tony Smurfit noted that demand for finished product was weakest in Germany and Britain, although he expected Germany to recover once energy fears subside. Spain, France, Italy and the Americas continued to show stronger demand, he said.
But he warned that across territories, the usual Christmas rush had not been evident.