Resin - Are we hitting a plateau?
Perhaps? Obviously the Strait of Hormuz is still effectively closed and gas is still high. The producers are still pushing for an increase but crude oil is down slightly from its peak, demand has declined some, and the world is adapting to the Strait closure.
A month ago, the industry was projecting a $0.20/lb increase in both May and June. The May increase ultimately did not happen. There is still a possibility of an increase in June but it will likely be more in the $0.10/lb range.
To take an optimistic approach: hopefully no more increases, the Strait reopens, and we start seeing resin decreases late 2026. But the outlook is uncertain…that will be a theme today.
What does this mean for packaging prices?
It wouldn’t be a shock for the stretch film manufacturers to start sending increase letters any day now. Stretch film is always the first domino to fall. Even if they push them out with a two to three week notice, they could rescind the notifications as they did in May. If there is an increase, expect it in the 6-10% range.
Regarding other items, there are a few increases going into effect in June. What I’m seeing is mostly glue and tape from a few manufacturers. As far as I can tell, these are remnants of previous raw material increases. In a normal world, every manufacturer of similar items increases almost simultaneously but with the craziness of the last few months (remember, March & April represented the largest two month increase in history), things got off-kilter as everybody tried to hold their baseline pricing as long as possible.
Regarding new increase announcements, there might be a few but I expect relative calm this month.
Corrugated - continued uncertainty
The industry was flat in May but don’t get comfortable. The net $50/ton increase recently passed was less than the $70/ton the big corrugators like Smurfit-WestRock, International Paper, and PCA had been pushing since late 2025. Sure enough, the big players are again trying to push another $50-$70/ton.
Demand is flat or maybe even a little down at the moment but that doesn’t change a couple realities.
Capacity Cuts: Permanent mill closures over the last two years have tightened supply far more than surface-level demand numbers suggest.
Sticky Overhead: While transportation costs leveled out slightly in May, labor and energy (among other) costs remain stubbornly elevated
I expect there to be another corrugated increase sometime this summer. FastMarkets RISI’s index comes out in Pulp & Paper on the third Friday of every month. That will be telling.
For what it’s worth, the plants who implemented fuel surcharges are still maintaining them.
Uncertainty shouldn’t change your plans
Gif by Autotraderuk on Giphy
Odds are that you’re still reeling from the massive hikes this year. Resin went absolutely nuts and then boxes decided to hop on the increase train as well. If you’re still using the same materials with the same processes, your packaging costs are presumably much higher than they were just a few months ago….even if you shopped suppliers. Which is to say, there’s likely still room to trim costs while not sacrificing efficiencies.
If you haven’t had an outside opinion in a while, there’s no time like the present. Price can only be beat down so much. A stretch film test, pack-out analysis, or redesigning the pack configuration are ways use less material than currently or drive down associated costs like labor.
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