The kraft commodity curve, explained
Why your new-box vendor's price changes every six weeks, and why the curve looks the way it does — for the buyers who'd rather understand it than just react.
Once a quarter or so, a customer asks why their new-box quote moved three or four percent since last month. The honest answer is: kraft commodity prices moved, and the vendor passed that through. The slightly longer answer is the rest of this post.
What kraft actually is
Kraft paper is the wood-pulp-derived paper that makes up corrugated. It's traded as a commodity in two main flavors — virgin kraft and recycled kraft (often quoted as "OCC," old corrugated containers). Virgin kraft is made from new wood pulp. Recycled kraft is made from collected used cardboard. The two prices track loosely together but can decouple, sometimes dramatically.
The four things that move the price
- Mill capacity. New mill openings or closures shift supply in chunky steps.
- Export demand. Asian recyclers buy U.S. OCC in waves, and a strong wave can spike domestic prices.
- Energy costs. Mills are energy-intensive. Natural gas and electricity prices flow through to kraft.
- Inventory psychology. Buyers who think prices will rise stock up, which makes prices rise.
The seasonal pattern
Kraft prices have a rough seasonal pattern, though it shifted noticeably after 2020. The general shape: cheapest in late summer (August), rising through fall, peaking in January (annual inventory accounting + post-holiday e-commerce dropoff + Asian export contract renewals), then settling through spring.
The January spike is the one that catches buyers off guard most often. If you're locking annual contracts, January is rarely the right month to do it.
Why used-box pricing moves less
New-box pricing tracks the kraft curve closely because the mill cost is the dominant input. Used-box pricing has a different cost structure — graders, refinishing labor, freight, and overhead are a much bigger share. So when kraft jumps 8%, new-box pricing might rise 6% while used-box pricing rises 2.5%.
This is a quiet structural advantage of buying used in a volatile kraft market. Your packaging cost becomes more stable, and your finance team gets fewer surprises.
The bottom line
If you buy new boxes, build a 4% quarterly volatility cushion into your packaging budget. If you buy used, you can probably get away with 2%. If you buy a mix and let your vendor optimize between them, you might land at 1.5% — which is the cheapest cushion in the building.