Finance
Mondi's dour outlook sends paper and packaging shares lower
Published by Global Banking and Finance Review
Posted on October 6, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on October 6, 2025
2 min readLast updated: January 21, 2026
Mondi's warning of weak demand sends paper and packaging stocks plummeting, with shares dropping over 17% to a 12-year low.
By DhanushVignesh Babu and Yadarisa Shabong
(Reuters) -Paper and packaging company Mondi warned on Monday of weak demand and falling prices across most pulp and paper grades, sending shares of the British company and its global competitors lower.
The industry has faced a prolonged downturn and the companies that remain after a period of consolidation over the last two years are navigating several challenges, including the effect of U.S. tariffs on the flow of global goods and a weak economic backdrop in Europe.
Demand for packaging has not become worse, nor has it become better, Mondi CEO Andrew King told analysts, adding that weakness in fine paper has persisted, with competitors fighting for share in a shrinking market.
"If one started to see some consumer confidence returning, some manufacturing confidence returning, that can change things quite quickly," King said, although he remained cautious about the short-term outlook.
Mondi's shares tumbled more than 17% to a 12-year low, headed for their biggest one-day percentage drop ever and the second-biggest faller on the STOXX 600 index.
European rivals including Enso, UPM and SCA were also lower while International Paper and Smurfit WestRock dropped about 4% in U.S. premarket trading.
"It is hard to see the corrugated market improving from these trough levels in the next couple of years," J.P. Morgan said in a note on Sunday as it downgraded Mondi's stock rating to "neutral" from "overweight".
Mondi, which operates in more than 30 countries, said it is reorganising into two business units from three and will delay a planned investment in a new paper machine at its Canadian pulp mill as it focuses on cost cuts and cash generation.
Third-quarter underlying core profit fell to 223 million euros ($260.35 million) from 274 million euros in the second quarter.
Jefferies said that points to 2025 underlying core earnings of 1 billion to 1.05 billion euros, below the average analyst estimate of 1.16 billion euros compiled by LSEG.
($1 = 0.8565 euros)
(Reporting by DhanushVignesh Babu and Yadarisa Shabong in Bengaluru; Editing by Tasim Zahid, Kirsten Donovan)
Weak demand refers to a situation where consumers are not purchasing products or services at expected levels, often leading to lower sales and revenues for companies.
Pulp and paper grades refer to the various types of paper products produced from wood pulp, categorized based on their quality, usage, and manufacturing process.
Market capitalisation is the total market value of a company's outstanding shares of stock, calculated by multiplying the share price by the total number of shares.
A financial crisis is a situation where financial assets suddenly lose a significant part of their nominal value, often leading to widespread economic instability.
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