AN ANNOUNCEMENT by the US paper company International Paper of a $50 a ton price increase in linerboard, effective from June 1st, is good news for Jefferson Smurfit Corporation. International Paper, the world's largest paper producer, is one of the main competitors of the Jefferson Smurfit Group associate in the US market.
If International Paper can implement the June price increase, all containerboard producers in the difficult US market will benefit. A June price rise would be the first increase for over six months.
International shares rose $0.875 to $40.625 after the announcement. In Dublin, Jefferson Smurfit group shares jumped 5 1/2p to 173 1/2p before falling back to close at 171p, a gain of 3p on the day.
The price of linerboard, which is used to make corrugated cardboard boxes, has fallen from $530 a ton in the third quarter of 1995 to about $380 to $390 a ton.
Paine Webber analyst Mr Richard Schneider says the price increase is "earlier than expected" but the market for containerboard has been improving. Figures for March show the first increase in box shipments since October 1995.
The announcement from International Paper will help put a floor on box prices, he says.
