Cardboard sector posts record results in July driven by booming economy

The Brazilian cardboard market – considered a barometer for the economy – is booming. Strong demand led shipments of boxes, accessories and corrugated cardboard sheets to reach a record monthly volume in July, of 371.3 thousand tons, according to the Brazilian Paper Packaging Association (Empapel), which has been collecting data since 2005. The number is 8% higher than that recorded in the same month of 2023.

For the ambassador and CEO of Empapel, José Carlos da Fonseca, the record result reflects the more heated market in the non-durable goods sector, such as in the poultry, fruit and food segments in general.

“When there is income in the hands of the consumer, it has an impact on the consumption of non-durable goods. In addition, the low level of unemployment and the boost of income transfer programs also put money in the hands of the consumer, which initially goes to food,” said Fonseca.

The executive mentioned that it is necessary to observe the behavior of monetary policy, assessing that the fluctuation of the interest rate curve may affect the performance of the cardboard market. As reported by Broadcast, the president of the Central Bank, Roberto Campos Neto, stated at an event promoted by XP Investimentos that a potential adjustment in the basic interest rate – if it happens – will follow a gradual dynamic.

As discussions on monetary policy move more cautiously, the cardboard market, on the other hand, continues to grow at a rapid pace.

Revision

The positive momentum in the market has led the sector to revise its growth outlook for 2024 for the second time. The first projection, released in early February, indicated a 1% increase in shipments considering the moderate outlook, a percentage that was reassessed in April to 2.8%. Now, the outlook is for a 4% increase for this year, to 4.18 million tons.

According to Fonseca, the big surprise in 2024 was the robust performance in the first half of the year, which went against the traditional seasonality of the sector, where the first half of the year is usually weaker. Given that the second half of the year is marked by major events and commemorative dates, the expectation is that the cardboard industry will continue to show positive performance.

“We are looking at the second half of the year as a period that could bring us more good news,” said Fonseca.