Energy & Coreboard Market Update – August 2026

At Just Paper Tubes, we do not normally comment on energy markets unless we believe they are becoming relevant to the outlook for cardboard.

At present, we believe they are.

The European coreboard market has already absorbed significant increases during 2026. Our concern now is that developments in gas, oil products and transport are beginning to create the conditions for further cost pressure as we move into autumn and winter.

This is not an announcement of a further JPT price increase. It is a market update — and an explanation of why we believe the balance of risk has shifted upwards again.

Europe's gas position is tightening

Europe has been rebuilding its gas inventories since the end of winter, but storage remains unusually low for this point in the year.

As of 20 August, EU gas storage was around 62% full. The five-year norm for mid-August is closer to 82% — a substantial shortfall for this point in the season.

That does not mean Europe is running out of gas. It does, however, mean that the buffer available heading into winter is considerably smaller than normal. The position is challenging enough that the European Commission has encouraged Member States to use the flexibility within EU storage rules to consider reducing their effective filling target to around 80%, rather than forcing purchases simply to reach the headline 90% level.

Europe must therefore continue buying and injecting substantial volumes of gas at exactly the point when competition for global LNG remains intense.

And the market has noticed.

Gas prices are sharply higher, and the driver is geopolitical as well as seasonal

In April, the UK NBP day-ahead gas price was trading around 112–122p per therm. On 19 August, it settled at approximately 157.25p per therm — an increase of roughly 30–40% depending on the exact April reference point.

The European TTF market has moved in much the same way. Front-month TTF was trading around €43–45/MWh in early April. By 18–19 August, European gas was trading at around €62–64/MWh — again, a rise of roughly 40–45%.

This is not simply a seasonal storage story. Since February 2026, recurring closures and military action around the Strait of Hormuz — including strikes on Qatari LNG export facilities — have caused direct, dated disruption to European gas and global oil markets, on top of the underlying seasonal storage shortfall. Gas prices actually eased through parts of May and June, in a period when passage through the Strait was briefly restored. The subsequent reversal, as the corridor closed again, demonstrates how rapidly European energy markets can tighten when storage, LNG availability and physical shipping disruption interact.

For an energy-intensive industry such as paper and board, that matters.

But what about oil? Isn't it lower?

This is where we think looking only at the headline oil price risks missing an important part of the story.

Brent crude averaged around $117 per barrel in April, when prices spiked on the back of the conflict involving the US, Israel and Iran. It is currently trading at roughly $91–93 per barrel.

On the face of it, that is a substantial fall — over 20% — and might suggest that transport and fuel pressures should be easing significantly.

Unfortunately, crude oil is only the raw material.

What manufacturers and hauliers actually buy is diesel.

And the diesel market is behaving very differently.

The problem is refined products

The International Energy Agency's August Oil Market Report highlights an increasingly significant disconnect between crude-oil prices and the availability of refined products.

Global refinery throughput in July remained almost 5 million barrels per day below the level a year earlier, at 80.9 mb/d — held down in part by continued Middle East product-export disruption and attacks on Russian refineries.

More strikingly, diesel exports from Russia, the Middle East and Asia were around 1.3 million barrels per day lower year-on-year.

That reduction alone is equivalent to approximately 20% of global seaborne diesel trade.

The result has been exceptionally strong diesel refining margins, with the IEA reporting record Atlantic Basin margins as diesel, jet fuel and gasoline cracks surged amid seasonally higher demand and depleted stocks.

So although the headline Brent price is now well below its April level, the part of the barrel that matters particularly heavily to industry and road transport has become much tighter.

Why can't America simply replace the missing oil?

US production certainly helps.

But one barrel of crude is not necessarily interchangeable with another.

Much of the additional oil produced from US shale formations is relatively light crude. It contains a different mix of hydrocarbons from many of the crude grades traditionally supplied from the Middle East.

Middle Eastern medium sour grades — crudes such as Arab Light, in the 28–34° API range — typically yield around 30–35% of the barrel as straight-run middle distillates: diesel and jet fuel. Light shale crude yields proportionally more naphtha and gasoline-range material and correspondingly less distillate per barrel. That means a barrel-for-barrel volume replacement does not equate to a diesel-for-diesel replacement, even before accounting for the separate loss of Gulf refining and export capacity itself.

US Department of Energy work on Bakken crude, for example, has demonstrated materially different diesel and naphtha yields compared with other crude grades.

Modern refineries can alter their product mix considerably, so this is not as simple as saying that one type of crude "cannot make diesel."

But it does mean that additional US shale production is not a perfect one-for-one

replacement for disrupted Gulf crude and, particularly, lost Gulf refinery output.

That distinction is important.

The current problem is not simply a shortage of crude oil. It is also a shortage of the right crude, available refining capacity and finished products in the places where they are required.

The IEA's figures show that additional supply from the Americas has so far only partly offset losses elsewhere, while the refined-product market remains considerably tighter.

So why is a cardboard tube manufacturer going on about gas and diesel?

Because ultimately somebody has to pay these costs — and many of them feed directly into the manufacture of coreboard.

Coreboard is predominantly manufactured from recovered paper.+

That sounds simple, but there is a significant industrial process between somebody putting a cardboard box into a recycling stream and a reel of coreboard arriving at our factory.

Recovered paper has to be collected.

It has to be sorted, processed and baled.

It then has to be transported to a paper mill.

At the mill, the material is repulped, cleaned, formed, pressed and — critically — dried.

Removing enormous quantities of water from paper requires substantial amounts of heat and energy.

The finished board then has to be wound, handled and transported to companies such as Just Paper Tubes.

So energy enters the coreboard cost base several times: gas and electricity at the paper mill; diesel in recovered-paper collection; fuel in waste processing and logistics; transport into the mill; transport from the mill; and the cost of numerous energy-intensive chemicals and other manufacturing inputs.

A rise in gas and diesel therefore does not hit the paper industry just once.

It can work its way through almost the entire supply chain.

The coreboard market has already moved

These pressures are not hypothetical.

Earlier this year, producers across Europe announced substantial coreboard increases.

Solidus announced increases of 7–10% from April, with CEO Niels Flierman citing rising costs in energy, lining papers, transport and other inputs as making the adjustment unavoidable.

Across the German coreboard market, negotiations during the second quarter — reportedly opening in the €40–60 per tonne range — ultimately settled at increases of around €50 per tonne in most cases, with EUWID subsequently reporting both higher prices and longer lead times in July, and in August more increases for September of 10%.

The wider European paper industry is not in a particularly strong position to absorb another major increase in costs either.

CEPI reported that European paper and board production declined by 1.6% during 2025 — with cartonboard, the segment most relevant to coreboard, falling considerably further, by 5.4%. Early 2026 production was already 2.4% lower year-on-year in the first quarter. CEPI continues to identify Europe's high energy and manufacturing costs as a structural problem for the sector.

That matters because prolonged weak margins eventually affect capacity.

Machines are curtailed, production is rationalised and, in some cases, mills close.

Once capacity has disappeared, it does not quickly return when demand strengthens.

Our concern is what happens next

The increases implemented during the spring and early summer largely reflected the cost environment that existed at that time — a period when, in fact, Brent crude was trading well above current levels amid the direct disruption to Gulf shipping and production that followed the closure of the Strait of Hormuz.

Since then:

• European gas prices have risen by roughly 40%, against a backdrop of recurring physical disruption around the Strait of Hormuz.

• Gas storage remains substantially below normal, and the position is difficult enough that the European Commission has invited Member States to use the flexibility in EU storage rules and target an effective 80% fill level this winter, rather than the headline 90%.

• Diesel and middle-distillate markets have tightened considerably, even as crude oil itself has fallen.

• Global refinery throughput remains constrained.

• Middle Eastern and Russian product exports remain disrupted.

• And European paper producers are already operating against a difficult cost and capacity backdrop.

That does not guarantee another coreboard increase.

Energy markets can move quickly in both directions, particularly if geopolitical conditions improve.

But it does mean that the argument that falling headline oil prices will automatically translate into cheaper cardboard is, in our view, far too simplistic.

Indeed, Brent crude falling by over 20% since April while gas and diesel markets move sharply in the opposite direction illustrates exactly why headline oil is the wrong number to watch.

Our market view

At Just Paper Tubes, our present view is that the risk to European coreboard pricing over the coming months is weighted more towards further increases than meaningful reductions.

We hope that energy markets stabilise and that this proves overly cautious.

However, with Europe entering the final part of the gas-storage season with lower inventories, gas prices rising sharply amid recurring disruption around the Strait of Hormuz, diesel supply constrained and the European paper industry already under cost pressure, we do not believe it would be sensible to assume that the coreboard increases seen earlier this year necessarily represent the end of the cycle.

For our customers, our priority remains the same: competitive pricing, continuity of supply and early visibility of changes in the market.

That is why we monitor markets well beyond the immediate price of cardboard — it is how we give our customers a level of visibility that others in this market often cannot.

Because what happens in gas terminals, oil refineries and European paper mills today can become the price of a cardboard tube several months later.

This is my own reading of the market, and I'm happy to talk through the detail with any customer who wants to.

Harry Coates

Managing Director

Just Paper Tubes ltd