The Death of the RISI Index? Why Major Producers Are Abandoning Price Benchmarks
An analysis of why major containerboard producers like IP and GP are moving away from Fastmarkets RISI index pricing, what it means for buyers, and how the market is adapting.
For decades, the containerboard industry relied on a simple shorthand for pricing: the Fastmarkets RISI index. When a mill announced a price increase, buyers, converters, and analysts could look to RISI's published benchmarks to understand where the market was heading. Contracts were written with RISI-linked escalation clauses. Procurement teams built budgets around RISI forecasts. The index was imperfect, but it was the closest thing the corrugated packaging industry had to a universally accepted pricing reference.
That consensus is now fracturing. Major integrated producers — including International Paper and Georgia-Pacific — have been distancing themselves from the RISI index, and the implications for corrugated buyers are significant.
What the RISI Index Actually Measures
Fastmarkets RISI (formerly RISI, acquired by Fastmarkets in 2019) publishes benchmark prices for various containerboard grades including 42-lb unbleached kraft linerboard, 26-lb semichemical corrugating medium, and recycled linerboard. These benchmarks are constructed from a combination of mill list prices, transaction data, and industry intelligence gathered by Fastmarkets analysts.
The published price is meant to represent the prevailing market rate for containerboard sold on the open market — specifically, board sold by integrated mills to independent corrugated converters who don't produce their own linerboard or medium.
Here's the critical limitation: the RISI index only captures transactions in the open market segment, which accounts for roughly 5% of total containerboard volume in North America. The vast majority of containerboard never hits the open market — it's consumed internally by integrated producers within their own converting operations.
Why That 5% Number Matters
The containerboard market in North America produces approximately 32-33 million tons annually. Of that total, integrated producers like Smurfit Westrock, International Paper, Georgia-Pacific, and Packaging Corporation of America consume the majority of their mill output internally, converting it into finished corrugated boxes at their own box plants.
The open market — where independent converters buy board from mills — represents a relatively thin slice of total production. And within that slice, the transactions that Fastmarkets can actually observe and verify are thinner still.
This creates a fundamental problem: a benchmark derived from a small, potentially unrepresentative sample is being used to set pricing expectations for an industry worth over $40 billion annually. When the open market tightens or loosens differently than the internal transfer market, the index can diverge significantly from the economic reality most participants experience.
Why Producers Are Walking Away
International Paper's Shift
International Paper has been the most visible in its departure from RISI-linked pricing. Following the DS Smith acquisition and the company's strategic restructuring, IP has moved toward bilateral pricing agreements with customers that are negotiated independently of any published benchmark.
IP's argument is straightforward: the RISI index doesn't reflect the actual cost-to-serve for their customer relationships. Variables like freight costs, service levels, order patterns, and volume commitments are more relevant to individual pricing than a single national benchmark.
There's also a competitive dynamic at play. When IP announces a price increase, RISI historically published that increase as a market benchmark, even before other producers followed. This created awkward situations where IP's unilateral announcement effectively became "the market price" in RISI's reporting, regardless of whether the increase actually stuck across the broader market.
Georgia-Pacific's Approach
Georgia-Pacific, the Koch Industries-owned producer that is the largest privately held containerboard manufacturer in North America, has similarly moved away from RISI-linked pricing structures. GP's approach emphasizes value-based pricing where the price reflects the specific product, service, and logistics package delivered to each customer.
GP's reasoning echoes IP's: a one-size-fits-all index doesn't capture the differentiation between customers who order truckload quantities of standard kraft liner versus customers who need smaller volumes of specialty grades with tight delivery windows.
The Smurfit Westrock Factor
As the world's largest listed packaging company, Smurfit Westrock's pricing approach carries enormous weight. The company has been moving toward more sophisticated pricing models that account for total cost of ownership rather than simple per-ton benchmark comparisons. While they haven't explicitly "abandoned" RISI, their pricing strategies increasingly de-emphasize the index as a reference point.
What This Means for Independent Converters
The independent corrugated converter community — represented by organizations like AICC — has the most at stake in the erosion of benchmark pricing. Independents don't make their own containerboard. They buy it from the same integrated producers who also compete with them in the finished box market.
Without a reliable, transparent benchmark, independents face several challenges:
Reduced price transparency. When every contract is bilaterally negotiated without reference to a common benchmark, it becomes harder for buyers to know whether they're getting a competitive price. Information asymmetry shifts power toward the seller.
Harder budgeting and forecasting. Procurement teams that built their annual budgets around RISI price forecasts now have to model multiple scenarios based on less certain data.
Contract complexity. Escalation clauses in multi-year supply agreements previously tied to RISI movements need to be renegotiated. What do you link them to instead? PPI data? CPI? A custom formula?
Competitive disadvantage. If large integrated buyers (like Smurfit Westrock's own converting operations) get preferential pricing that's invisible to the market, independents have no way to assess or challenge the gap.
The Fastmarkets Response
Fastmarkets hasn't been idle as its flagship product loses relevance. The company has been investing in broadening its data collection, developing alternative price assessment methodologies, and launching digital tools for more granular market intelligence.
Their argument is that the index remains the best available proxy for market direction, even if it doesn't capture every transaction. They've also been working to incorporate more transaction-level data — rather than relying solely on announced list prices — to improve the benchmark's accuracy.
However, expanding data collection in an industry where the largest participants are actively declining to share pricing information is a fundamental challenge. If IP, GP, and Smurfit Westrock don't participate in the survey process, the data pool shrinks further, creating a self-reinforcing cycle of declining relevance.
What Might Replace It?
Several alternative pricing approaches are emerging:
1. PPI-Linked Contracts
The Bureau of Labor Statistics publishes Producer Price Index data for containerboard (NAICS code 322130) that's publicly available and independently calculated. Some converters are moving toward PPI-linked escalation clauses as a replacement for RISI.
The advantage is objectivity — the government data isn't influenced by industry participants. The disadvantage is that PPI data is lagged, less granular, and doesn't differentiate between grades as precisely as RISI.
2. Custom Cost Models
Larger independent converters are building proprietary cost models that estimate fair market pricing based on observable inputs: OCC costs, energy prices, freight indices, and mill operating rates. These models aren't published benchmarks but rather internal negotiation tools.
Our own price tracking tools provide some of the underlying data that feeds these models, including OCC pricing trends and containerboard price movements.
3. Direct Negotiation with Market Intelligence
Some buyers are simply abandoning formulas altogether and negotiating each contract on its merits, armed with as much market intelligence as they can gather. This approach favors sophisticated procurement teams at larger companies and disadvantages smaller buyers with less market access.
4. Regional or Grade-Specific Benchmarks
There's growing interest in more granular benchmarks — pricing data for specific regions, specific grades, and specific order profiles rather than a single national number. Whether Fastmarkets or a competitor can deliver this level of detail remains to be seen.
The Historical Parallel: Pulp and Paper Markets
The containerboard market isn't the first paper segment to experience benchmark erosion. The global market pulp sector went through a similar transition in the early 2010s when major producers challenged the relevance of established benchmarks. The result was a period of pricing opacity that eventually gave way to new digital platforms offering more real-time transaction data.
The corrugated industry may follow a similar arc — a painful transition period of reduced transparency followed by the emergence of better, more granular pricing tools. But that transition could take years, and in the interim, buyers need strategies for navigating uncertainty.
What Buyers Should Do Now
If you're buying containerboard or corrugated boxes, here's how to adapt to the post-RISI landscape:
Build your own intelligence. Track the inputs that drive containerboard pricing: OCC costs, energy prices, mill operating rates, and capacity changes. Understanding cost drivers gives you leverage even without a benchmark.
Diversify suppliers. If one producer moves to opaque bilateral pricing, having alternative suppliers creates competitive pressure and provides data points for comparison.
Invest in contract language. Work with procurement professionals who understand how to write escalation clauses that aren't dependent on a single benchmark. Multi-factor formulas that incorporate PPI data, OCC prices, and energy indices can be more robust than single-benchmark links.
Join industry networks. AICC, FBA, and other industry organizations facilitate information sharing among members. The collective intelligence of the independent converter community partially compensates for the loss of formal benchmarks.
Monitor the transition. This situation is still evolving. Fastmarkets may develop better products. New competitors may enter the market intelligence space. Regulatory attention to pricing transparency in concentrated markets is increasing. Stay informed.
The Bigger Picture
The erosion of the RISI index is a symptom of a broader trend: the corrugated packaging industry is consolidating into fewer, larger players who have the market power to set terms rather than accept market-determined pricing. When three or four companies control the majority of containerboard capacity, the "market price" increasingly reflects what those producers decide it should be rather than what emerges from competitive trading.
For the corrugated industry to maintain the trust of its customer base — the brand owners, e-commerce companies, and manufacturers who depend on corrugated packaging — some form of credible, independent price transparency needs to survive the current transition. Whether that comes from a reformed Fastmarkets, a new entrant, government data, or an industry consortium remains the open question.
What's certain is that the old model — a single published number that everyone used as the reference price — is dying. What replaces it will shape the economics of corrugated packaging for years to come.