Q3-2026: Manufacturing, Consumables, & Packaging News

Managing Continued Volatility and Recovering Costs Where Possible

Businesses enter Q3 2026 facing a cost environment that remains volatile but is no longer moving in only one direction. Tariff policy continues to change, while geopolitical tensions and energy disruptions can quickly affect transportation, raw materials, and supplier pricing. At the same time, recent pullbacks in several commodity markets show that buyers should not assume every increase received during the first half remains justified.

Freight-related costs and lead times remain vulnerable to sudden disruption. Renewed tension around the Strait of Hormuz and threats in the Red Sea have already caused vessels to change course, increasing the risk of longer transit times and higher freight, fuel, and insurance costs. U.S. diesel prices climbed from $4.58 to $5.13 per gallon in just two weeks, and a major global shipping carrier announced an emergency fuel surcharge of $65–$165 per container beginning August 1. _1,2,3 Russia’s recent ban on all diesel exports complicates diesel pricing further, as Russia is the second largest exporter of diesel. ⁴ This does not mean freight rates will rise equally on every lane, but buyers should be prepared for possible fuel surcharges and delivery delays.

Tariffs also present a significant recovery opportunity. ERA Group recommends a dedicated Tariff Refund Score tool, which gives importers a quick, illustrative view of whether IEEPA duties paid on 2025 imports may be recoverable and whether a more detailed review is warranted. Refunds are not automatic, and eligibility may depend on importer status, entry data, timing, and filing accuracy. The clock is already ticking, so companies should review their tariff position now rather than risk missing applicable filing opportunities.  ⁵

KEY TAKEAWAYS: Buyers should require documentation for tariff, freight, and fuel-related increases and distinguish temporary surcharges from permanent price changes. Any surcharge should include a clear calculation, effective period, and reset point. Companies that imported goods during 2025 should also act promptly to determine whether previously paid IEEPA duties may be recoverable—TariffsTool.com/ERA can help

Corrugated

North American corrugated pricing moved decisively higher during the second quarter. Fastmarkets RISI recognised a $50-per-tonne containerboard increase in June, bringing the net increase for 2026 to $100 per tonne after volatile movements earlier in the year. ⁶

The increase appears to be supported less by exceptional box demand than by nearly 10% of containerboard capacity removed during 2025, rising recycled-fibre costs, and tighter producer control of available supply. The increases are now appearing in converted products. The U.S. Producer Price Index for corrugated shipping containers rose 2.3% in June and 5.1% from December through June. The index for corrugated paperboard sheets and rolls increased 4.7% over the same period. ^7,8

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Looking ahead, the risk of another RISI increase has grown. The three largest North American containerboard producers have announced a third round of 2026 increases for September 1: $140 per tonne from Packaging Corporation of America, $100 per tonne from Smurfit Westrock, and $80 per tonne from International Paper. Producers cite tight supply, continued cost pressures, and improving or sustained demand.³⁰ Still, announced increases are not the same as realised or Fastmarkets RISI recognised price movement. Given mixed demand conditions and likely buyer resistance, the extent of any autumn increase remains uncertain.

KEY TAKEAWAYS: Another round of producer announcements does not automatically justify immediate finished-box increases. Buyers should distinguish announced mill increases from actual Fastmarkets RISI movement and require suppliers to show the agreed index starting point, effective date, board-content calculation, and contractual pass-through factor. Previously published decreases should be applied as consistently as subsequent increases, while freight, fuel, and other adders should be evaluated separately.

Lumber & Pallets

Lumber and pallet prices are facing renewed upward pressure heading into the second half of 2026. Reduced sawmill production has tightened lumber supplies, while shortages of usable cores are also raising recycled-pallet costs. Higher freight and fuel expenses are adding further pressure . ⁹

Recent data reflects these increases. The U.S. Producer Price Index for wood pallets rose 1.3% in June and 3.8% from February through June (Source 10). Broader lumber prices also reached a one-year high in July, supported by tight inventories, transportation challenges, and Canadian wildfires. ^{11, 12} However, general lumber prices do not always translate directly into pallet costs, which vary by region, design, material, and whether pallets are new or recycled.

Looking ahead, pallet pricing will likely remain firm through the summer, with further increases possible where lumber or recycled-pallet cores remain scarce. Broader lumber prices may ease later in the year as seasonal demand slows, so buyers should be cautious about accepting large or permanent increases. ¹³

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KEY TAKEAWAYS: Buyers should ask suppliers to explain the specific reasons for any increase, including lumber, recycled-pallet availability, freight, and fuel. Price agreements should also allow reductions when these costs decline.

Chemicals & Gases

Chemical markets experienced an exceptionally volatile first half of 2026. Sharp swings in oil and energy costs, higher freight and insurance expenses, and Middle East supply disruptions have resulted in frequent—and sometimes substantial—chemical price increases.  The U.S. Producer Price Index for industrial chemicals increased 19.2% from January through June, while the index for chemical wholesalers increased 17.7%. ^{15, 16}

As of July 21, below is a summary of the current chemical supply-chain landscape:

• Oil and feedstock costs remain highly unpredictable. Brent crude averaged $85 per barrel in June—$32 below its April peak—but climbed above $90 again in July (and briefly spiked above $100) as Middle East tensions intensified. ^{17, 18}
• Shipping risk has expanded beyond the Strait of Hormuz. New threats in the Red Sea have caused some vessels to change courses, potentially adding up to four weeks of transit time and increasing freight and fuel costs. ¹⁶
• Longer lead times, reduced operating rates, delayed plant restarts, and selective force majeure declarations remain possible where feedstock or transportation disruptions occur.
• Chemical prices are not moving uniformly. Weak demand and excess production capacity continue in parts of the industry, meaning broad references to oil or geopolitical conditions do not justify every supplier increase. ¹⁹

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Looking ahead, chemical pricing is expected to remain volatile through Q3 and potentially through the remainder of 2026. Additional increases and selective supply constraints are possible, particularly for petroleum-based chemicals or products dependent on affected shipping routes. However, prices could also retreat if oil declines, supply routes stabilise, or weak demand outweighs short-term disruption.

KEY TAKEAWAYS: Chemical buyers should evaluate price increases product by product and require suppliers to identify the affected feedstock, production location, freight route, or documented supply event. Temporary surcharges should include expiration dates and clear reset points, while index-based pricing should allow costs to move back down when market conditions improve.

Plastics

Plastic resin prices rose sharply during the first half of 2026, leaving the market unsettled as Q3 began. Government pricing data shows that plastic resin prices increased 21.5% from January through June, despite pulling back slightly from their May peak. Prices for many finished plastic products still increased in June, suggesting that recent resin decreases have not yet reached buyers of converted products. ²⁰

Resins are also no longer moving in the same direction. Polyethylene prices fell $0.15 per pound in June after increasing $0.45 through April, while polypropylene declined $0.09 per pound in June following a $0.07 decrease in May. In contrast, polystyrene increased another $0.03 per pound in June, largely because of continued pressure from benzene costs. ²¹

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For the remainder of 2026, buyers of polyethylene, polypropylene, PVC, and PET may have more negotiating leverage as supplies remain plentiful and demand remains relatively weak. Other resins, including polystyrene, ABS, polycarbonate, and nylon, remain more vulnerable to oil, feedstock, and geopolitical volatility (Source 22). Conditions could change quickly, but the outlook will vary significantly by resin.

KEY TAKEAWAY: Suppliers should be expected to provide the specific resin-market data supporting their pricing—not rely solely on broad references to oil or market volatility. Buyers should review increases received during the first half of the year and push suppliers to pass through recent resin decreases promptly. Pricing agreements should allow prices to move both up and down as resin costs change.

Metals

Metal prices remained elevated entering Q3 2026 after substantial first-half increases. Government data shows that steel mill products increased 14.6%, aluminium mill shapes increased 19.0%, and copper and brass mill shapes increased 7.5% from January through June.23 Carbon steel and galvanized products remain firm because of limited availability, tariffs, and extended lead times. Certain aluminium products also remain tight (about 10% of the global aluminium supply goes through the Strait of Hormuz), while low inventories continue to support copper prices. ^{24, 25, 26, 27}

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Cost pressure is not uniform across the market. Scrap, iron ore, coking coal, and nickel have recently been flat or lower, providing some relief, particularly for stainless steel. U.S. steel prices may begin easing later in Q3 as demand softens and imports improve, while aluminium has already pulled back from its June highs. ²⁸

Tariffs continue to influence steel, aluminium, copper, and many finished metal products. The applicable rate can vary based on the specific product, metal content, and country of origin, so buyers should be cautious when suppliers use a general “50% metals tariff” explanation to support an increase. ²⁹

KEY TAKEAWAY: Suppliers should identify the specific market movement or tariff supporting their pricing, including the imported product, country of origin, and applicable tariff rate. A 50% tariff does not automatically justify a 50% customer price increase, particularly for domestically produced material or products in which metal represents only one portion of the cost. Buyers should also push suppliers to pass through decreases when metal indexes, raw-material costs, surcharges, or market premiums decline.

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About the authors

Patrick Garr and Travis Cantrell are manufacturing specialists with ERA Group. They  both hold engineering degrees and have over 29 years of collective experience studying  complicated client expenditures in direct material, industrial chemicals/gases, packaging supplies, and factory consumables/MRO. ERA utilises its in-depth subject-matter expertise to negotiate with suppliers and deliver best-in-class sourcing solutions for their clients.

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Sources

^{1-Reuters, “CMA CGM will impose emergency surcharge due to renewed Hormuz tensions,” July 22, 2026.}

^{2-Reuters, “More ships change course in Red Sea after Houthi threats, data shows,” July 22, 2026.}

^{3-U.S. Energy Information Administration, “petrol and Diesel Fuel Update,” July 20, 2026.}

^{4-Hydrocarbon Processing, “Russia's diesel export ban deepens global supply crunch,” July 13, 2026.}

^{5-U.S. Customs and Border Protection, “IEEPA Duty Refunds,” updated July 2026.}

^{6-Packaging Dive, “Containerboard prices increase again despite mixed demand outlook,” June 22, 2026.}

^{7-U.S. Bureau of labour Statistics Producer Price Index data, accessed through the Federal Reserve Bank of St. Louis}

^{8-U.S. Bureau of labour Statistics Producer Price Index data, accessed through the Federal Reserve Bank of St. Louis}

^{9-ePallet, “June 2026 Pallet Market Update,” June 2026.}

^{10-U.S. Bureau of labour Statistics, “Producer Price Index for Wood Pallets and Pallet Containers,” updated July 15, 2026.}

^{11-Madison’s Lumber Reporter, lumber price index and market update, July 15–17, 2026.}

^{12-Madison’s Lumber Reporter, lumber price index and market update, July 15–17, 2026.}

^{13-Trading Economics, “Lumber Price—Chart, Historical Data and Forecast,” accessed July 21, 2026.}

^{14-KPMG, Q1 2026 Chemicals M&A report.}

^{15-U.S. Bureau of labour Statistics, Producer Price Index data, updated July 15, 2026 (Industrial Chemicals).}

^{16-U.S. Bureau of labour Statistics, Producer Price Index data, updated July 15, 2026 (Chemicals and Allied Products Merchant Wholesalers).}

^{17-U.S. Energy Information Administration, “Short-Term Energy Outlook,” July 7, 2026.}

^{18-Reuters, oil and shipping-market reports, July 21, 2026.}

^{19-Reuters, “European chemical earnings to test demand recovery after conflict-led pricing boost,” July 20, 2026.}

^{20-U.S. Bureau of labour Statistics, Producer Price Index data, updated July 15, 2026: Plastics Material and Resin Manufacturing and June 2026 Producer Price Index report}

^{21-Plastics News, polypropylene, polystyrene, and polyethylene pricing updates, July 6 and July 13, 2026. Polypropylene and polystyrene update | Polyethylene update}

^{22-PlasticsToday, “Resin Price Report: Buyers Face Closing Window on Pricing Leverage,” July 13, 2026.}

^{23-U.S. Bureau of labour Statistics, Producer Price Index data, updated July 15, 2026: Steel Mill Products, aluminium Mill Shapes, and Copper and Brass Mill Shapes.}

^{24-CORE Report, July 17, 2026. 25-Ferguson Weekly Newsletter, week of July 20, 2026.}

^{26-Ryerson, Monthly Metals Brief, July 2026.}

^{27-Reuters, copper-market update, July 20, 2026.}

^{28-S&P Global Market Intelligence, “Commodity Price Watch: July 2026,” July 17, 2026.}

^{29-U.S. Section 232 tariff actions and guidance: April 2 metals proclamation, June 1 tariff update, and July 20 aluminium action.}

^{30 – Packaging Dive, “More producers announce price hikes for containerboard, boxboard,” July 28, 2026.}