The continual rising costs of both raw material and energy costs have sparked product price increases, averaging $40 per ton.
As of March 1st, Corrugated Medium is down 6.6% from one year ago. Corrugated shipments are the highest since October 2006 amounting to a current rate of 35,070 tons/month; a 12.5% increase from one year ago. U.S. containerboard mills, in general, operated at 97.1% of capacity for the month of February and produced 2.79 million tons.
OverviewThe market for paper-making machinery and the associated converting equipment used to make corrugated material is difficult to predict. Since there is an adequate supply of equipment, buyers are very selective about what they will purgeantares. Newer, wider, high-speed equipment is most desirable. Older, narrower, slower equipment might only be salable as components, if at all. Most sales of complete paper machines are going offshore with the majority going to India. A working mill was recently sold to continue in operation but with most of the capacity committed to export to India. This transaction was driven, in part, by the weak U.S. dollar.
The secondary market for finishing equipment that converts corrugated material into boxes is more stable and predictable. Historically, this machinery has retained value well. Since there is a direct correlation between economic conditions and the demand for packaging and shipping materials, the demand for box board and corrugated shipping materials is expected to decrease. This could impact the value of older corrugators and finishing equipment, but there no trends suggesting a lost in value of used equipment evident in the market currently. Notably, some of the older equipment sold in the early 2000's to dealers on speculation is still available for sale. Dealers of used equipment are reporting that pricing is holding steady despite the fact that the volume of inquiries has declined.
Used Equipment Values – FairPapermaking machinery
- Supply of used equipment – Increasing
- Demand for used equipment – Decreasing
- Supply of used equipment – Stable
- Demand for used equipment – Stable
- Recent bankruptcy filings
- Port Townsend Paper filed on January 29, 2007
- Earthshell Corporation filed on January 19, 2007
Valuation MonitorAccuVal routinely provides appraisal, consulting, and asset management services to the Pulp & Paper industry including all related converting equipment. View industries serviced >>
Representative Clients Our Associates Have Served
- Caraustar Industries, Inc.
- Port Townsend Paper Corporation
- Longview Fibre
- Calpine Corrugated
- Beresford Box Company Inc.
- Buyer Found for Bankrupt Paper Mill, Environmental Liabilities Averted, Jobs Saved
- Billions Lent in Every Segment of the Paper Industry Based on AccuVal Appraisals
- AccuVal Foils Attempt to Secure Asset Based Financing Based on Suspicious Documentation
- Outcome of Machinery Disposition Improved by $1.2 Million while Also Securing the Seller a Complete Environmental Indemnification Worth Millions
- Secured Lender Protected from Environmental Exposure in Mill Disaster
- View all Success Stories