WestRock's (WRK) Plans to Idle Machines Seen as Positive for Containerboard Industry - KeyBanc
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WestRock's (NYSE: WRK) plan to idle two containerboard machines is seen as a positive for the North American containerboard industry, according to KeyBanc analyst Adam J. Josephson.
Josephson explained, "According to RISI, WRK plans to "indefinitely idle" its 166,000 tons/yr. recycled medium mill in Uncasville, CT, and the 520,000 tons/yr. kraft linerboard No. 3 machine at its Fernandina Beach, FL, mill following its acquisition of SP Fiber. RISI indicated that WRK is also reportedly considering indefinitely idling another older medium mill. RISI further indicated that WRK has reportedly been running the 200,000 tons/yr. recycled medium machine at its Seminole mill in Jacksonville, FL, on a reduced schedule. Lastly, RISI noted that as previously reported, WRK began a 30-day maintenance outage at its 683,000 tons/yr. Florence, SC kraft linerboard mill, which would result in an estimated production loss of 57,000 tons."
The analyst added, "We view WRK's reported actions as a positive for the North American containerboard industry; our assumption all along has been that kraft linerboard prices would remain stable in 2015 and 2016 on account of the large producers taking downtime as necessary to keep the market balanced, and WRK appears to be doing so (assuming the story is accurate, which we believe it is)."
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