Containerboard Capacity Cuts in 2025: Which Mills Closed and Why It Matters

The North American containerboard industry permanently removed approximately 6% of its production capacity during 2025, the most significant supply reduction in over a decade. Two headline closures — International Paper's Campti, Louisiana mill and Georgia-Pacific's Cedar Springs, Georgia facility — accounted for the lion's share, but smaller curtailments and conversions across the industry compounded the effect.

This was not accidental. It was a deliberate, industry-wide response to years of structural oversupply. And it is already changing the pricing dynamics that every corrugated buyer needs to understand.

The Major Closures

International Paper — Campti, Louisiana

IP's Campti mill was a medium-sized containerboard facility producing approximately 900,000 tons per year of unbleached kraft linerboard. The mill had operated since 1928 and employed roughly 1,100 workers at the time of the closure announcement.

IP cited several factors in the decision:

• High operating costs relative to newer, more efficient mills in IP's system
• Capital investment requirements — The aging facility needed significant modernization to remain competitive
• Portfolio optimization — With the DS Smith acquisition adding capacity, IP had more production flexibility and could afford to shutter less efficient assets
• Environmental compliance costs — Older mills face escalating costs to meet tightening air and water quality standards

The Campti closure removed nearly 2% of total North American containerboard capacity in a single move.

Georgia-Pacific — Cedar Springs, Georgia

GP's Cedar Springs mill was one of the largest containerboard facilities in the Southeast, producing approximately 1,000,000 tons per year of linerboard. The closure stunned the industry — Cedar Springs was not considered a marginal asset.

GP's reasoning was more strategically driven:

• Market rationalization — GP determined that permanently removing capacity would create a healthier supply-demand balance across the industry
• Consolidation of production — GP redirected volume to its remaining mills, improving operating rates and per-unit economics at those facilities
• Long-term pricing strategy — By reducing structural oversupply, GP positioned the entire industry — including its own remaining capacity — for better pricing

The Cedar Springs closure removed roughly 2.5% of North American containerboard capacity, and its Southeast location meant particularly acute supply impacts for converters in that region.

Smaller Curtailments and Conversions

Beyond the two major closures, several other capacity reductions contributed to the approximately 6% total reduction:

• Smurfit Westrock rationalized several smaller converting-integrated mills as part of its post-merger optimization, removing an estimated 300,000-400,000 tons of combined capacity
• Several independent mills took extended downtime or reduced operating rates, effectively removing additional tonnage from the market
• Machine conversions — At least two containerboard machines were converted to produce other paper grades (primarily kraft paper for bags), removing capacity from the containerboard market specifically

Why the Industry Cut Capacity

To understand why the industry removed this much capacity simultaneously, you need to understand the structural oversupply problem that had built up over the preceding years.

The Oversupply Cycle

Between 2018 and 2023, the North American containerboard industry added significant new capacity through major machine investments:

• IP brought a rebuilt machine online at its Riverdale mill
• WestRock (pre-merger) completed major capacity additions
• Several independent producers expanded or debottlenecked machines

These investments were made during a period of strong demand growth driven by the e-commerce boom and pandemic-era supply chain building. But when demand growth moderated in 2023-2024, the industry found itself with more capacity than the market needed.

The result was predictable: operating rates fell below 90%, spot pricing softened, and price increase attempts failed. In the containerboard business, an industry operating rate below 93-94% makes it extremely difficult to implement and sustain price increases. By early 2025, the rate hovered around 89-91%, putting intense pressure on margins.

The Rational Response

Rather than continuing to compete for volume at depressed prices, the major producers chose to permanently close their least efficient capacity. This is a classic oligopoly rationalization play, and the corrugated industry has executed it before — most notably in 2008-2009 and 2014-2016.

The key difference in 2025: the closures were larger and more permanent. Instead of temporary curtailments (shutting machines for weeks or months), the industry permanently closed entire mills. Campti and Cedar Springs cannot be restarted. The capacity is gone.

The Impact on Operating Rates

The ~6% capacity reduction has fundamentally shifted the supply-demand balance. Here's the math:

The swing from approximately 89% to 94-95% operating rates crosses the critical threshold where producers regain pricing power. At 95%+ operating rates, supply is tight enough that buyers have limited ability to switch suppliers or push back on pricing.

How This Affects Containerboard Pricing

The capacity cuts have already begun translating into pricing actions. Packaging Corporation of America announced a $70/ton price increase effective in early 2026 — the first successful increase attempt in over a year. Other producers have followed with similar announcements.

The mechanics are straightforward:

1. Tighter supply gives producers leverage. When operating rates exceed 93%, buyers can no longer easily source alternative tons.
2. Cost justification exists. Input costs — including OCC, energy, labor, and chemicals — have risen, providing a legitimate cost basis for increases.
3. Fewer producers means more coordination. With IP, Smurfit Westrock, and GP controlling the vast majority of capacity, pricing signals are clear and response times are fast.

For the latest pricing data, visit our containerboard price tracker.

Regional Impacts

The closures have not affected all regions equally:

Southeast

The Southeast was disproportionately affected by the Cedar Springs closure. Mills in Georgia, Alabama, and the Carolinas serve a dense concentration of corrugated converting plants. The loss of Cedar Springs capacity has created tighter supply conditions and longer lead times for Southeast converters, particularly those buying linerboard on the open market.

Gulf Coast / South Central

The Campti closure hit the Gulf Coast and South Central regions, affecting converters in Louisiana, Texas, Arkansas, and Mississippi. Some of this volume has been redirected from IP's other mills, but transportation costs are higher for more distant supply points.

Midwest and Northeast

These regions have been less directly affected, as neither major closure was nearby. However, the ripple effects of tighter national supply have reached all markets. Converters in these regions report somewhat longer order lead times and less flexibility from suppliers on spot purchases.

What This Means for Corrugated Box Buyers

If you buy corrugated boxes, the capacity cuts affect you in several concrete ways:

Prices Are Going Up

The math is simple: tighter supply equals higher prices. After more than a year of relatively flat or declining containerboard costs, the trend has reversed. Budget accordingly — plan for containerboard-driven box price increases of $40-70/ton to flow through to your finished box costs over the next 6-12 months.

To understand how containerboard prices translate to box costs, read our guide on the corrugated box pricing formula.

Lead Times May Extend

When mills operate at high rates, the buffer of available inventory shrinks. Your box supplier may see longer lead times on containerboard delivery, which extends their lead time to you. If you currently operate on a just-in-time basis with 1-2 weeks of box inventory, consider building a modest safety stock.

Supplier Relationships Matter More

In a loose market, switching suppliers is easy — everyone wants your business. In a tight market, your existing suppliers prioritize loyal, established customers. This is not the time to shop your box business around purely for price savings. Maintain strong relationships with your current suppliers while keeping backup options open.

Contract Timing Is Critical

If your corrugated contracts come up for renewal in 2026, you're negotiating in a seller's market. Consider:

• Locking in multi-year contracts with price escalation caps rather than annual fixed pricing
• Building in index-based pricing tied to published containerboard indices to share risk with your supplier
• Negotiating volume commitments in exchange for supply guarantees during tight periods

Will the Capacity Come Back?

This is the critical question, and the answer is almost certainly: not anytime soon.

Building new containerboard capacity is a multi-year, multi-billion-dollar endeavor. A new state-of-the-art containerboard machine costs $1-2 billion and takes 3-4 years from announcement to production. No major new machine projects have been announced as of early 2026.

More importantly, the industry learned from the post-pandemic cycle that adding capacity aggressively leads to oversupply and margin destruction. The current rationalization reflects an industry consensus that disciplined supply management produces better long-term returns than volume-at-all-costs growth.

The capacity that closed in 2025 is gone permanently. And the operating environment it created — tighter supply, higher operating rates, and more effective pricing — is the new normal for the foreseeable future.

The Bottom Line

The containerboard capacity cuts of 2025 represent the most significant supply-side restructuring in the corrugated industry in over a decade. For buyers, the implications are clear: prices are rising, supply is tightening, and the leverage that characterized the soft market of 2023-2024 has shifted decisively back to producers. Adapting procurement strategies to this new reality is not optional — it's essential.