Global packaging paper markets are entering what analysts describe as a high-risk zone, with the rapid expansion of paper-packaging capacity in Asia coinciding with only modest growth in demand.
While the region remains the chief engine of packagingpaper growth, the mismatch between capacity additions and usage has raised concerns of excess supply, softening prices, and rising export pressure on slower-growing markets in Europe and the Americas.
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Mounting overcapacity in Asia
In Asia, capacity growth in containerboard and other fibre-based packaging grades has far outstripped demand ascent.
According to a recent forecast by Fastmarkets, the region’s demand for containerboard for 2024 rose an estimated 2.2 %, down from about 3.3 % in 2023.
At the same time, capacity was expanding at an average annual rate of around 6.1 % between 2020 and 2023.
Operating rates have dipped into the low 70 % range for the region and into the mid-60s for China specifically.
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By GlobalDataMoreover, industry sources estimate global containerboard overcapacity at roughly 22 million tonnes, of which Asia accounts for nearly 70 %.
These figures signal that the region’s enormous build-out of capacity—especially in countries such as China, Indonesia and India—is not guaranteed to be absorbed locally.
The risk: once local consumption cannot keep pace, excess production will need to find outlet elsewhere, likely via export flows into mature markets where demand growth is weak.
Pressure on Europe and the Americas
In Europe, the packaging-paper industry is already operating in a challenging environment. High energy costs, subdued demand for graphic and writing papers and a push to convert mills into packaging grades have squeezed margins and investment appetite.
For the UK, for example, electricity costs among the highest in advanced economies have put pressure on energy-intensive manufacturing including paper production.
The weak demand backdrop in Europe heightens the risk that an influx of Asian product will depress local operating rates and margins. European mills face competition not just in domestic markets but increasingly from fibre-based packaging exports.
In the Americas, while demand growth remains flat to moderate, the prospect of cheaper imports from Asia adds to the challenge.
With global packaging-paper supply tightening only minimally, and trade flows increasingly open, the slower-growth markets may find themselves contending with softer prices and surplus capacity displacing domestic production.
What the packaging-paper industry should watch
For buyers and producers of packaging paper and board, several factors warrant close monitoring.
First, mill start-ups in Asia—including linerboard and cartonboard machines—will influence when and how new supply hits the market. A slide in operating rates could herald price pressure.
Second, trade policy and export logistics will matter. If Asian producers shift to export heavily, the resulting flows into Europe or North America could tip local market balances.
Third, demand growth must be reassessed realistically. While Asia continues to grow its packaging materials consumption, recent data show more modest expansion: for paperboard case materials in Asia for example the annual growth rate between 2013 and 2024 averaged just +2.9 % in volume.
In contrast, projects of capacity growth are much larger.
For producers, margins are likely to remain under pressure until demand catches up or capacity growth slows.
For supply-chain planners, securing optionality across grades (containerboard, cartonboard, linerboard) and regions becomes a hedging strategy.
In short, the global packaging-paper market faces a period of uncertainty: strong regional growth in Asia is setting the stage for what might become a global oversupply, with implications for pricing, trade flows and industry consolidation.
