Market Prices & Forecast
Executive Summary
- The Paper and Paperboard market remained largely stable in February 2026, with prices consolidating after the January adjustments. Kraft paper prices held steady across most regions, with selective firmness seen in the South, while duplex board prices stabilized following the earlier correction. Raw material trends showed firmness, with domestic OCC at INR 18.5/kg and US OCC rising to USD 170/ton. Additionally, India’s recovered wastepaper imports rebounded in FY26 (Jan–Oct up 18.8% YoY), reinforcing continued reliance on global fiber markets. Rising energy costs, particularly coking coal, have added incremental cost pressure entering Q1 CY26.
- Demand indicators improved entering JFM’26, supported by stronger manufacturing momentum across FMCG, beverages, consumer durables, and pharma. The reduction in US tariffs from 25% to 18% is expected to support export-linked packaging demand, improving order visibility. Overall, market sentiment has strengthened compared to early January, with stable supply and improving downstream activity providing a supportive near-term backdrop.
Critical Analytics
- The demand environment is showing gradual structural strengthening, with the projected rise in the paper and paperboard demand index in JFM’26 indicating improved packaging consumption. Since manufacturing drives nearly 78% of India’s IIP, seasonal production acceleration is translating into better dispatch volumes and order flows. However, imports continue to account for a significant portion of recovered fiber demand, underscoring structural dependence on overseas supply.
- At the same time, input cost risks are building. Firm US recovered paper prices and elevated energy costs could tighten mill margins if not offset by price pass-through. While domestic collection has improved moderately, the supply-demand balance remains sensitive to global wastepaper availability and currency movements, keeping cost-side volatility relevant for the coming months.
Outlook: Kraft paper and duplex board prices are expected to remain range-bound with a mild upward bias in the near term, supported by improving packaging demand and firm input costs. Any sustained rise in wastepaper or energy prices could prompt selective upward revisions, while continued manufacturing strength will be key to maintaining pricing stability through Q1 CY26.