Massive increases in energy prices and impending shortages of raw materials

The corrugated board industry condemns the war of aggression against Ukraine and expressly supports the sanctions against Russia. At the same time, however, the industry sees itself in extreme distress due to rapid price increases in the energy sector and the impending shortage of raw materials, according to the Verband der Wellpappen-Industrie e. V. (VDW). Even before the war broke out, the market situation was tense and the cost pressure had been higher than ever before for months.

The dizzying price increases recently observed in the energy sector are affecting a corrugated board industry that has been confronted with constant increases in costs for many months, warns VDW Chairman Dr. Steffen P. Würth. According to media reports, the wholesale prices for natural gas climbed more than ever before in the past week According to this, the price for a megawatt hour on the Dutch exchange TTF on March 7 was around 350 euros at times. In March 2021, on the other hand, the end-of-day value had always remained below 20 euros per megawatt hour. The corrugated board industry itself, but also the suppliers of corrugated base paper, are largely dependent on natural gas as an energy source. “Even now, paper mills have been closed due to gas prices getting out of control. In combination with the loss of kraftliner imports from Russia, there is a risk of a shortage of our most important raw material, corrugated base paper – and that under the condition of paper prices being at historically high levels even before the start of the war,” explains Würth. The VDW chairman emphasizes that the fuel prices, which were fueled by the war, are also hitting the corrugated board industry very hard. On March 9, the ADAC reported a nationwide average of 2.15 euros per liter of diesel fuel and thus an increase of 39.4 cents compared to the previous week – which corresponds to the largest price jump of all time at German petrol stations. VDW members are also already reporting delays in logistics, ever-scarcer freight space and production stops or disruptions in the packaging industry.