UK Energy Costs and Cardboard Tube Prices: Further Movement Is Now More Likely
- JPT Team
- 12 hours ago
- 4 min read
Just Paper Tubes, a UK manufacturer of cardboard tubes and paper cores, reviews what Ofgem’s latest energy price-cap decision and Britain’s low gas-storage position could mean for coreboard and cardboard tube prices.
Following our August 2026 Energy & Coreboard Market Update, the evidence has moved further in the direction we were already watching.
For businesses sourcing cardboard tubes in the UK, this matters because the cost of coreboard is closely connected to wholesale gas, electricity, recovered paper and transport.
These movements do not reach paper core and cardboard tube prices overnight. However, they can work their way through the paper supply chain over the following months.
In our previous update, we said that the balance of risk in European coreboard pricing had shifted upwards, although we stopped short of saying that another increase was likely.
Developments since then mean that our assessment has become firmer.
Ofgem’s price cap points to higher underlying energy costs
Ofgem has confirmed that its domestic energy price cap will rise by 4% for the period from 1 October to 31 December 2026.
For a typical household paying by Direct Debit for gas and electricity, the annualised figure will increase from £1,663 to £1,723.
The price cap applies to domestic default tariffs. It does not determine the energy prices paid by paper mills, Just Paper Tubes or other industrial manufacturers.
However, it remains a useful, independently calculated indicator of the direction in which underlying energy costs are moving.
More importantly, the headline 4% increase does not tell the whole story.
Ofgem says that the wholesale-cost allowance within the cap has increased by 11% during the past three months. Within that figure, the gas wholesale allowance has risen by 13% and the electricity wholesale allowance by 10%.
The effect on the overall household cap has been partly offset by the temporary removal of VAT from domestic electricity bills.
As a UK cardboard tube manufacturer, those underlying wholesale movements are considerably more relevant to us than the £60 household headline.
Low UK gas storage increases the winter price risk
At the same time, concerns have increased over the amount of gas Britain has stored ahead of winter.
UK gas-storage facilities were reportedly around 30% full this week, compared with 46% at the same point last year and more than 90% during each of the previous two years.
The reported figure is the lowest recorded for August.
The European gas market has also moved further since our previous update.
We reported front-month Dutch TTF gas at approximately €62–64 per megawatt hour on 18–19 August. It has since risen above €69 per megawatt hour, its highest level since March.This does not mean that Britain will necessarily run out of gas.
The UK continues to receive energy from North Sea production, Norwegian pipelines, European interconnectors and its LNG import terminals.
However, low storage reduces the buffer available if the weather turns colder, an import route is disrupted or international competition for LNG intensifies.
A country can remain physically supplied while still being forced to pay substantially more for the energy it imports.
Why energy costs affect coreboard, paper cores and cardboard tubes
Coreboard is predominantly manufactured from recovered paper.
That sounds straightforward, but there is a substantial industrial process between somebody placing a cardboard box into a recycling stream and reels of pre-slit coreboard arriving at our factory.
Recovered paper must be collected, sorted, processed and baled. It is then transported to a paper mill, where the material is repulped, cleaned, formed, pressed and — critically — dried.
Removing large quantities of water from paper requires substantial amounts of heat and energy. The finished board must then be wound, slit, handled and transported to cardboard tube manufacturers such as Just Paper Tubes.
Energy therefore enters the coreboard cost base several times:
gas and electricity at the paper mill;
diesel used in recovered-paper collection;
fuel used in waste processing and logistics;
transport into and out of the mill; and
energy-intensive chemicals and other manufacturing inputs.
A rise in gas, electricity and diesel does not hit the paper industry only once. It can work its way through almost the entire supply chain.
That is why the price of industrial cardboard tubes and paper cores cannot be considered in isolation from the wider energy market.
The coreboard market has limited room to absorb another shock
These latest movements are not occurring against a neutral starting point.
European coreboard producers have already implemented substantial increases during 2026, while the wider paper industry continues to face weak margins, high manufacturing costs and pressure on production capacity.
Any further energy shock would therefore be absorbed by a market with limited room to accommodate it.
That does not guarantee another supplier increase. Energy markets can still change direction, particularly if geopolitical conditions improve.
However, the present direction of travel is becoming increasingly difficult to ignore.
Our updated view on UK cardboard tube prices
In our previous market update, we said that the risk to European coreboard pricing was weighted more towards further increases than meaningful reductions.
We would now go one step further:
"Unless there is a material reversal in gas, diesel and wider energy markets, we believe that further upward movement in European coreboard pricing during the autumn and winter is now more likely than not."
“While we now believe further price movement is more likely than not, customers should not confuse price pressure with a supply issue. We remain confident in our ability to maintain continuity of supply and meet customers’ forecast requirements throughout the autumn and winter.”
Harry Coates, Managing Director, Just Paper Tubes ltd
This is not a formal announcement of a Just Paper Tubes price increase.
The timing and scale of any future supplier movement remain uncertain, and energy markets could still move in the opposite direction.
It does, however, mean that businesses budgeting for cardboard tubes and paper cores during the final quarter of 2026 and the beginning of 2027 should not simply assume that current pricing will remain unchanged throughout that period.
At Just Paper Tubes, our priorities remain competitive pricing, continuity of supply and giving customers the earliest possible visibility of material changes.
We monitor energy, recovered paper, coreboard and logistics because early market visibility helps our customers plan their cardboard tube and paper core requirements with greater confidence.
Because what happens in gas terminals, energy markets and European paper mills today can become the price of a cardboard tube several months later.
