SunSirs: Corrugated Paper Maintains a Stable Downward Trend in July, with a Weak and Stable Trend in the Short Term

https://www.chemnet.com   Jul 30,2024 SunSirs

According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of corrugated paper still showed a downward trend in July, but the downward trend slightly slowed down. On July 29th, the average ex factory price of 140g corrugated paper was 2,598 RMB/ton, a decrease of 1.07% compared to the average price of 2,626 RMB/ton on July 1st.

In terms of upstream raw materials, the price of waste paper in Zhejiang region fluctuated in July, with a slight increase in overall prices. On July 29th, the average purchase price of A-grade waste yellow board paper in Zhejiang region was 1,491 RMB/ton, an increase of% compared to the average price on July 1st. At the beginning of the month, due to the difficulty in pushing up the price of raw paper and the strong wait-and-see atmosphere in the market, the upward trend of waste paper was weak. Due to the continuous expansion of the shutdown range of paper mills in some areas affected by rainy weather, the demand for waste paper in paper mills has significantly decreased.

In mid July, as the southern rainy season is coming to an end, the recycling of waste paper will gradually resume. The price of waste paper in Zhejiang region has slightly increased. Due to the reduction of waste paper inventory in previous paper mills, the purchase of waste paper in paper mills has been more active, resulting in a price increase. However, the prices of waste paper in other regions of China are still weak, and some leading paper companies have increased their inventory of waste paper, leading to a decrease in domestic market prices.

Supply side: In early July, large-scale paper mills announced price adjustment measures, with Jiulong Dongguan and Tianjin bases lowering some raw paper prices by 30-50 RMB/ton, driving down quotes from some regional paper mills. In the state of "northward paper southward" in the market, the supply pressure on the northern market has been alleviated, but on the contrary, it has intensified price competition in the southern region, making it difficult for paper mills to push up prices. In addition, the generally high inventory of paper mills has also limited further price increases.

In late July, the supply of corrugated paper in the market was stable, and the shipment and order volume of leading paper companies were relatively average. During the off-season, the market received fewer orders, and the inventory consumption of paper mills was slower. However, some small and medium-sized paper mills are in a pessimistic state towards future prices, with high pressure on paper mill shipments and actual negotiations, resulting in a low market transaction center and a wait-and-see attitude.

In terms of demand, downstream market demand is still weak, packaging factories have increased bearish sentiment, weak purchasing willingness, and the purchase of raw paper remains mainly for essential needs. This also leads to a slower consumption rate of raw paper. Under the influence of this factor, downstream customers lack confidence in market transactions and are not actively aware of order stocking, resulting in low new order transactions for paper companies and a sluggish market.

The paper analyst from SunSirs believes that the current market sentiment is weak due to various factors such as bleak market conditions, limited increase in downstream orders, and high inventory pressure on paper companies, leading to a wait-and-see attitude among industry players. In addition, the prices of waste paper in most regions of China are still weak, and there is currently no favorable support for paper prices on the cost side. It is expected that the price of corrugated paper will remain weak and stable in the short term.

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