Because of the long working month against a shortened Easter schedule last year, shipments actually rose 1.7% to 33.378 billion sq. ft. before accounting for the difference. Through April, they were off 1.3% on an actual basis, FBA said.

The weak economiuc environment for corrugated has ended any chance for announced $50/ton price hikes to be implemented at the moment.

However, tightening supply of linerboard due to the shutdown of International Paper's Vicksburg, Miss., mill for some six to seven months could very well change the market's condition by late summer.

IP said its Vicksburg mill, closed since a May 3 bouiler explosion, should be repaired by mid-November. But the loss of some 275,000 tons total, or 45,000 tons per month, will mean that it will be scrambling in the marketplace to meet its own box plant requirements.

The mill’s production represents approximately 10.5% of International Paper’s linerboard capacity, and 1.5% of the industry’s North America capacity.

In April, with a drop in U.S. containerboard production due to maintenance and the extra box plant operating schedules, U.S. industry inventories of containerboard fell 133,300 tons, or 5.3% from the end of March, to 2.398 million tons.

The inventory drop was the largest in five months and included a 105,400-ton decline at box plants and 27,854-ton drop at the mill level. It not only ended a five months of consecutive increases but left levels at their lowest for April since 2004 and second lowest in the past 20.

According to American Forest & Paper Association (AF&PA) data for April, U.S. containerboard production of 2.85 million tons was a 0.2% drop from a year earlier, as mill operating rates dropped to 94.7%, including 93.5% for linerboard. The industry downtime of 160,000 tons was the most since January 2007, asccording to independent analyst Richard Storat in his Scoring Boxes newsletter.

Tonnage produced for export, although 48,000 tons below the March level, were 11.7% above last April’s volume, leaving the four-month amount up 9.3%..

While the box shipment data continued to reflect a slow U.S. manufacturing climate in which industrial production declined 0.7% and manufacturing output 0.8% in April, two industry analysts viewed the month’s inventory shift as quite positive.

“It’s hard not to view both the sharp monthly decline and the absolute level of inventory as constructive indicators,” said Mark Wilde, forest products analyst with Deutsche Bank Equity Research,.

“We are increasingly optimistic that this year's price hike initiative will play out like last year's – dormant through the spring and most of the summer but implemented in August/September,” he wrote.

“We feel increasingly optimistic that the price hike will be eventually implemented in an August/September timeframe,” Wilde added.

Chip Dillon, Citigroup Investment Research managing director, said that the recovery boiler accident at Vicksburg, “could continue to drive inventory levels down, and give cause to raise prices.”

He pointed also to the importance of the IP-Weyerhaeuser containerboard transaction receiving Justice Department antitrust approval. Together, he said, “we see an August-September board/box price as increasingly likely,” noting that such a case has not yet been put into Citigroup estimates.