AF&PA: U.S. Packaging Paper Rises in July, Printing Paper Demand Slumps

U.S. packaging paper markets posted modest gains in July 2026 while printing and writing paper demand continued to weaken, according to the latest monthly data from the American Forest & Paper Association.

Why This Matters

The July 2026 data from AF&PA underscores the diverging trajectories across U.S. paper markets. Packaging papers continue to show resilience supported by e-commerce and industrial demand, while the printing-writing segment faces persistent headwinds from reduced office and commercial paper consumption.

For market participants, the key takeaway is clear: packaging paper demand remains constructive even as printing and writing grades struggle to find footing in a softening domestic environment.

Packaging Paper Performance

Shipments of packaging papers and specialty packaging products rose 1% from July 2025. Cumulative shipments during the first seven months of the year were 5% higher than the same period in 2025, indicating steady underlying demand.

The operating rate for unbleached packaging papers improved to 87.5% in July from 85.7% in June. However, the rate remained below levels recorded from February through May. On a year-to-date basis, the operating rate was 5.1 percentage points above last year.

Bleached food wrapping shipments declined 3.6% year over year in July, although shipments remained 2.7% higher for the first seven months. Packaging paper inventories in July rose to their highest level since February. However, inventory levels were 4.9% lower than a year earlier.

Printing-Writing Paper Weakness

The printing-writing paper segment's total shipments fell 9% from July 2025, while inventories increased 3% from June. All three major categories—uncoated free sheet, coated free sheet and mechanical paper—recorded lower July shipments than a year earlier.

Coated free sheet posted the smallest decline, with shipments falling 6%. U.S. purchases of printing-writing papers showed little change in June, in line with the ongoing weakness in domestic demand.

What the Inventory Data Showed

Inventory trends reinforced the contrasting dynamics between the two segments. Packaging paper inventories in July rose to their highest level since February but remained 4.9% below year-earlier levels, suggesting supply remains relatively tight.

In the printing-writing segment, inventories increased 3% from June, reflecting softer offtake and a buildup of supply amid declining shipments.

What Happens Next

Market participants will watch whether packaging paper demand can sustain its year-to-date momentum through the second half of 2026. For printing and writing papers, the outlook remains challenged as structural demand pressures persist across uncoated free sheet, coated free sheet and mechanical paper categories.

Courtesy: Scrap Monster