Sector Snap: Containerboard producers post gains

NEW YORK - Shares of companies that make cardboard box materials rose Tuesday after an analyst noted prices have stopped falling in what may be a sign that the sector has found a bottom.

Deutsche Bank analyst Mark Wilde said in a client note that producers "are showing discipline by keeping inventories increasingly lean and operating rates at historical lows, despite black liquor incentives."

Black liquor incentives are federal subsidies to companies — like the ones that make containerboard, as cardboard box materials are called — that use alternative fuels to operate their mills. The higher the mills' utilization rate, the more federal money companies get.

The result of that discipline is evident in June prices. Containerboard prices this month have remained at $540 per ton, after falling $70 per ton since last fall, Wilde said.

Before June, containerboard prices had dropped for each of the last six months.

The analyst also noted that some containerboard exporters have reported stronger volumes.

In afternoon trading, shares of P.H. Glatfelter Co. rose 37 cents, or 4.4 percent, to $8.87, International Paper Co. gained 68 cents, or 4.7 percent, to $15.09 and Packaging Corp. of America added $1, or 6.5 percent, to $16.50.

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