{"id":9647,"date":"2025-10-07T02:55:14","date_gmt":"2025-10-07T06:55:14","guid":{"rendered":"https:\/\/www.packagingindustrynews.com\/?p=9647"},"modified":"2025-10-07T02:55:14","modified_gmt":"2025-10-07T06:55:14","slug":"mondi-warns-of-weak-demand-as-shares-plunge-in-paper-and-packaging-sector","status":"publish","type":"post","link":"https:\/\/www.packagingindustrynews.com\/?p=9647","title":{"rendered":"Mondi warns of weak demand as shares plunge in paper and packaging sector"},"content":{"rendered":"


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The warning comes as the paper and packaging sector faces oversupply and a weak European economy. \/ Credit: T. Schneider via Shutterstock<\/figcaption><\/figure>\n<\/p><\/div>\n

Shares in packaging and paper group Mondi fell sharply on Monday after the company issued a cautionary outlook, citing weak demand and falling prices across pulp and paper grades.<\/p>\n

\u00a0The warning rattled investor confidence in the paper and packaging sector, dragging Mondi shares to a 12-year low.<\/p>\n

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third-quarter earnings disappoint amid weak market conditions
Mondi\u2019s third-quarter underlying core profit fell to \u20ac223 million, down from \u20ac274 million in the second quarter.<\/p>\n

The company said volumes remained subdued and selling prices declined in most grades, particularly in fine paper and corrugated segments.<\/p>\n

Citing fragile demand, Mondi described the trading environment as challenging and flagged continued weakness for the rest of the year. CEO Andrew King told analysts that demand for packaging \u201chas not become worse, nor has it become better,\u201d and that weakness in the fine paper market persisted.<\/p>\n

Industry peers hit by negative sentiment<\/h2>\n

Mondi\u2019s share price dropped more than 17 % in a single session, reaching its lowest level in over a decade.<\/p>\n

The rout also weighed on global peers: European firms such as Enso, UPM and SCA fell, while U.S. names including International Paper and Smurfit WestRock dropped by around 4 % in premarket trading.<\/p>\n

Analyst response and stock downgrades<\/h2>\n

In a note published ahead of trading, J.P. Morgan said it was \u201chard to see the corrugated market improving from these trough levels in the next couple of years,\u201d and downgraded Mondi from \u201coverweight\u201d to \u201cneutral.\u201d<\/p>\n

Jefferies, meanwhile, adjusted its forecast, projecting 2025 underlying core earnings between \u20ac1 billion and \u20ac1.05 billion\u2014below the consensus of \u20ac1.16 billion compiled by LSEG.<\/p>\n

Restructuring and investment delays under cost pressure<\/h2>\n

Facing a weak backdrop, Mondi announced a reorganisation: it will operate under two business units rather than three, folding the uncoated fine paper segment into its corrugated operations.<\/p>\n

The company also said it would delay investment in a new paper machine at its Canadian pulp mill as it shifts focus to cost cutting and cash generation.<\/p>\n

Having completed much of its expansion cycle, Mondi now plans capital expenditure to concentrate on maintenance and efficiencies, rather than large-scale growth projects.<\/p>\n

Outlook for paper and packaging sector remains uncertain<\/h2>\n

Mondi\u2019s warning underscores continued strain across the paper and packaging industry. Oversupply in key markets, weak industrial demand in Europe, and aggressive pricing competition are pressuring margins and volumes across the sector.<\/p>\n

Unless consumer and manufacturing confidence recover, analysts see little room for near-term relief. J.P. Morgan\u2019s outlook suggests limited upside for corrugated demand in the short to medium term.<\/p>\n

Market participants will be watching upcoming earnings updates and any signs of stabilisation in demand and pricing.<\/p>\n

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