ERA Group's quarterly insights regarding market conditions; potential impacts on procurement; and supply chain planning.
Tariffs dominate the outlook: shorter buys and itemised pricing are critical
Tariffs are the headline risk into late Q4. The White House set 10% tariffs on lumber and 25% tariffs on cabinets/vanities and upholstered furniture effective Oct 14; with higher rates possible in 2026; and signalled 25% tariffs on medium- and heavy-duty trucks starting Nov 1. These moves raise the odds of supplier pass-throughs; particularly where parts/content sourcing is global and exclusions are limited.1;2;3;4 Companies are already telegraphing that margin pressure will push them to itemise tariff adders; expect larger firms to lead this charge.5
Ocean freight is benign with global container rates near $1;650–$1;690 per 40-foot container in mid-October;6 U.S. truckload spot rates are up only a few cents month over month;7 and diesel prices are easing versus September 8 - all consistent with stable delivered costs into year-end.
The practical implication for purchasing is to lean on shorter buying cycles (60-90 days); request index-tied formulas for all pricing movements; and require HTS-level proof for any tariff surcharges. Where tariffs touch upstream inputs (furniture/wood; trucks/parts); ask vendors to separate base price versus tariff versus freight/fuel so you can negotiate each lever independently. The current freight backdrop gives buyers room to hold the queue on price adders.
KEY TAKEAWAYS: Policy is the swing factor; not logistics - keep buys short; demand itemised tariff pass-throughs; and use today’s softer freight and stable rates to lock index-tied holds into early 2026 and possibly beyond.
Corrugated
Box demand remains muted heading into Q4 as U.S. manufacturing stays contracted.9 The American Forest and Paper Association reports containerboard production down 5% year over year in Q2;10 which resulted in cautious shipments into late summer. U.S. OCC (old corrugated containers) prices held in August;11 and national truckload spot rates were flat through late September.12 Structurally; PCA (Packaging Corporation of America) closed on its purchase of Greif’s U.S. containerboard assets in September; which results in a regional and competition shift to watch.13 Analysts see signs the down-cycle is easing after about 3.9M tons (or 9.5%) of 2025 capacity cuts; but expect only a gradual recovery. Forecasts still point to flat linerboard through the first half of 2026; with a modest late 2026 uptick (about $40/mt) as operating rates improve.14;15
Chart Data: Pulp and Paper Weekly RSI Index
KEY TAKEAWAYS: Expect stable-to-soft corrugated pricing next quarter; buy in shorter tranches and press for index-tied pricing (PPW/RISI); scrub freight/fuel adders; and run multi-mill/alternate-plant bids while demand stays subdued. Lastly; consider planning for modest late 2026 firming.
Timber/pallets
The U.S. wood pallet and lumber markets look steady short term; but the setup is cautious. There was a light increase in pricing at the beginning of October as buyers worked through inventory that was front-loaded ahead of the October 14 Section 232 tariffs (10% on softwood lumber; 25% on certain wood products). Softer housing demand and affordability constraints tempered fresh orders; while domestic mills increased shipments; and Canadian exports stayed constrained by duties.16 The September newsletter from ePallet.com echoes that mills reducing operating rates signify “weak market conditions and economic uncertainty; which could tighten supply later in the year.”17
Chart Data: TradingEconomics.com
KEY TAKEAWAYS: It’s more important than ever to plan ahead for lumber and pallet purchasing. Ever-changing tariffs; as well as the usual geographical and meteorological risks during this season; can lead to regional price swings.Treat Q4 pricing as rangebound with pockets of firmness; buy in 60–90-day tranches with dual-region coverage; require itemised tariff pass-throughs; and lean on recycled/repair to capture best value. Lastly; bear in mind that Q4 is considered “retail season” with the run-up to holiday shopping; which typically increases demand and pricing.
Chemicals & gases
Pricing remains generally steady on the industrial side: producer‐price gauges show industrial chemicals easing a touch since spring while industrial gas manufacturing is holding near recent levels; consistent with soft pull-through but firm contract discipline from suppliers.18;19 Recent market wraps echo a calm feedstock backdrop (ethane steady; propane easing; ethylene spot in the high-teens/low-20s ¢/lb) and no broad U.S. outages, helpful for delivered costs into Q4.20;21
Policy noise is present; but near-term tariff passthrough risk looks contained for covered inputs: USTR extended 178 China Section 301 exclusions through Nov 29; 2025; so keep surcharge claims tied to specific HTS lines and effective dates. 22;23
Meanwhile; large industrial-gas producers continue to stress price discipline even as volumes wobble in some regions - another reason to anchor formulas to transparent indices rather than blanket surcharges.
Operationally; the U.S. asset base is running without systemic tightness; and logistics are behaving; combined with stable feedstocks; that points to a buyer-friendly window to tidy up terms for early 2026.24;25
Chart Data: Producer Price Index by Commodity: Chemicals and Allied Products: Industrial Chemicals
KEY TAKEAWAYS: Expect stable-to-soft industrial chemical/gas costs next quarter; buy in 60–90-day tranches; tie pricing to Henry Hub/NGL; PPI; or other recognised indices where relevant; and challenge tariff/surcharge adders with the current USTR exclusion timeline while maintaining dual-source coverage to capture spot concessions.
Plastics
Resin tone is calm heading into Q4: PE and PP\ are largely flat; with producers struggling to push increases as demand stays soft; PVC fell again in September on weak construction pull-through. 26;27;28 Ferguson’s early-/mid-October wraps echo the same setup, full inventories; discounted exports; and spot ranges steady, and note that recent U.S. plant upsets (e.g.; Dow Freeport; CPChem Cedar Bayou; Formosa Point Comfort) didn’t translate into broad tightness.29;30
PET is the outlier. Tariffs are set to push PET resin prices higher in October; reversing late-summer softness; Plastics News flags “unexpected tariff impacts” as the primary driver.31 Broader tariff policy remains fluid (reciprocal rates and carveouts by country/product); so expect PET; and any recycled-content specs tied to import flows; to feel more pressure than commodity PE/PP.32
Bottom queue for purchasing: treat commodity resins as range-bound and bid actively—keep cycles short; lean on export parity and multisupplier quotes; and tie formulas to transparent markers. For PET; validate any tariff pass-throughs to the exact HTS queue and effective date; and keep USMCA/domestic options warmed up in case imports thin.
Chart Data: TradingEconomics.com
KEY TAKEAWAY: Expect stable-to-soft PE/PP/PVC next quarter while PET faces tariff-driven firmness; buy in 60–90-day tranches; run multi-supplier bids (including recycled options where feasible); and index-tie pricing, requiring written; itemised tariff pass-throughs on PET to capture best value.
Metals
U.S. sheet steel prices are holding in a narrow range; with typical HRC lead times around 4–6 weeks; CRC and galvanized generally track HRC with their usual spreads.33;34 Stainless adders ticked higher: for example; North American Stainless raised its fuel surcharge to 32%; effective October 1; so audit surcharges separately from the base price.35 On policy; Washington in August broadened steel/aluminium tariff coverage to 407 additional product categories at 50% (downstream fabricated items included); verify any surcharges map to those HTS lines.36 The EU is pressing the U.S. to scale back metals-content tariffs; but nothing has changed yet for U.S. buyers.37
Chart Data: BusinessAnalytiq
KEY TAKEAWAY: Treat sheet steel (HRC/CRC/galvanized) as range-bound with 4-6 week lead times; buy short and wide (multi-mill bids); unbundle and audit surcharges (especially stainless fuel adders); and require HTS-level proof for any tariff pass-throughs before accepting price moves.
Sources:
(1) Reuters — new wood product tariffs effective Oct 14; (2) Trucking Dive — How Oct 1 lorry tariffs might play out for the industry; (3) Manufacturing Dive – Trump lorry Tariffs Coming Nov 1; (4) Reuters — announcement of steep tariffs on drugs; heavy trucks; and more; (5) ICIS – INTERVIEW: US firms expected to pass through tariffs to preserve margins; (6) Drewry WCI; (7) DAT — September spot rates up 1–3¢/mile into mid-October; (8) EIA — U.S. retail diesel; (9) September 2025 ISM Manufacturing PMI Report; (10) American Forest & Paper Association Monthly Report - Aug 2025; (11) Fastmarkets US export bulk grade prices steady in August;(12) DAT Freight & Analytics; (13) Packaging Dive; Sept 2; 2025; (14) Corrugated comeback? fibre’s yearslong slide could be easing; (15) RaboResearch North America Containerboard Quarterly Q3-2025; (16) Trading Economics -- Lumber; (17) ePallet – Pallet Market Update; September 2025; (18) BLS/FRED PPI—Industrial Chemicals; Aug 2025; (19) BLS/FRED PPI—Industrial Gas Manufacturing; Aug 2025; (20) Ferguson Weekly Newsletter – Week of October 6; 2025; (21) Ferguson Weekly Newsletter – Week of October 13; 2025; (22) USTR Extends Certain Exclusions from China Section 301 Tariffs; (23) Federal Register notice (Aug 27; 2025); (24) Ferguson Weekly Newsletter – Week of October 6; 2025; (25) Ferguson Weekly Newsletter – Week of October 13; 2025; (26) Plastics News livestream recap — resin pricing trend flat-to-down for September (PE; PP; PVC); (27) Plastics News — PP prices flat in Sept; October drop likely on lower PGP; (28) Plastics News — PVC resin prices autumn for second straight month (Sept); (29) Ferguson Weekly Newsletter – Week of October 6; 2025; (30) Ferguson Weekly Newsletter – Week of October 13; 2025; (31) Plastics News — “Tariffs to push PET resin prices higher in October;” Oct 2; 2025.; (32) Reuters Tariff Watch; (33) Reuters—U.S. HRC futures quote page (Oct 17; 2025); (34) TradingEconomics—HRC steel price snapshot (Oct 16; 2025); (35) North American Stainless—fuel surcharge to 32% effective Oct 1; 2025; (36) Reuters—U.S. expands 50% steel/aluminium tariffs to 407 categories (Aug 19; 2025); (37) Reuters—EU presses U.S. to drop metals-content tariffs (Oct 14; 2025)Reuters — new wood product tariffs effective Oct 14; (2) Trucking Dive — How Oct 1 lorry tariffs might play out for the industry; (3) Manufacturing Dive – Trump lorry Tariffs Coming Nov 1; (4) Reuters — announcement of steep tariffs on drugs; heavy trucks; and more; (5) ICIS – INTERVIEW: US firms expected to pass through tariffs to preserve margins; (6) Drewry WCI; (7) DAT — September spot rates up 1–3¢/mile into mid-October; (8) EIA — U.S. retail diesel; (9) September 2025 ISM Manufacturing PMI Report; (10) American Forest & Paper Association Monthly Report - Aug 2025; (11) Fastmarkets US export bulk grade prices steady in August;(12) DAT Freight & Analytics; (13) Packaging Dive; Sept 2; 2025; (14) Corrugated comeback? fibre’s yearslong slide could be easing; (15) RaboResearch North America Containerboard Quarterly Q3-2025; (16) Trading Economics -- Lumber; (17) ePallet – Pallet Market Update; September 2025; (18) BLS/FRED PPI—Industrial Chemicals; Aug 2025; (19) BLS/FRED PPI—Industrial Gas Manufacturing; Aug 2025; (20) Ferguson Weekly Newsletter – Week of October 6; 2025; (21) Ferguson Weekly Newsletter – Week of October 13; 2025; (22) USTR Extends Certain Exclusions from China Section 301 Tariffs; (23) Federal Register notice (Aug 27; 2025); (24) Ferguson Weekly Newsletter – Week of October 6; 2025; (25) Ferguson Weekly Newsletter – Week of October 13; 2025; (26) Plastics News livestream recap — resin pricing trend flat-to-down for September (PE; PP; PVC); (27) Plastics News — PP prices flat in Sept; October drop likely on lower PGP; (28) Plastics News — PVC resin prices autumn for second straight month (Sept); (29) Ferguson Weekly Newsletter – Week of October 6; 2025; (30) Ferguson Weekly Newsletter – Week of October 13; 2025; (31) Plastics News — “Tariffs to push PET resin prices higher in October;” Oct 2; 2025.; (32) Reuters Tariff Watch; (33) Reuters—U.S. HRC futures quote page (Oct 17; 2025); (34) TradingEconomics—HRC steel price snapshot (Oct 16; 2025); (35) North American Stainless—fuel surcharge to 32% effective Oct 1; 2025; (36) Reuters—U.S. expands 50% steel/aluminium tariffs to 407 categories (Aug 19; 2025); (37) Reuters—EU presses U.S. to drop metals-content tariffs (Oct 14; 2025)
