Smurfit Kappa shares rise on price hike plan

Shares in paper packaging giant Smurfit Kappa rose in early Friday trading on news that the group plans to increase the price of a recycled containerboard, used to make cardboard boxes.

Smurfit said a €60 a tonne increase in recycled containerboard prices will become effective on February 1st across all its main continental European markets.

Within the first hour or trading, shares in the company rose by as much as 1.9 per cent to €24.565 in Dublin.

“This follows similar announcements on recycled prices from other players in the industry [recently],” said Barry Dixon, an analyst with Davy. “We estimate that more than 50 per cent of the containerboard industry has announced recycled containerboard price increases for February.”

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Mr Dixon said that if recycled containerboard increases are successfully passed through to the final product, corrugated boxes, it could result in analysts upgrading their 2017 and 2018 forecasts for the company.