SunSirs: China Corrugated Paper Remains Stable in September

https://www.chemnet.com   Sep 29,2024 SunSirs

According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of corrugated paper remained stable with small fluctuations in September, and remained stable with a slight downward trend. On September 27th, the average ex factory price of 140g corrugated paper was 2,594 RMB/ton, a decrease of 0.61% compared to the average price of 2,610 RMB/ton on September 1st.

In terms of upstream raw materials, the price of waste paper in Zhejiang Province steadily increased in September. On September 27th, the average purchase price of A-grade waste yellow board paper in Zhejiang Province was 1,543 RMB/ton, an increase of 1.98% compared to the average price on September 1st. In mid to early September, paper mills across the country adjusted their waste paper prices based on their own needs. As a result, the range of rainfall in China narrowed, and the supply of waste yellow cardboard remained stable. However, some paper mills in certain regions still have a demand for stocking up on waste paper, resulting in a steady increase in waste paper prices. In late September, with the end of Mid Autumn Festival stocking, the pressure on finished paper inventory in paper companies increased, and the intention of paper mills to start production may be under pressure, which is not conducive to the expansion of waste yellow cardboard consumption and the stable operation of prices.

On the supply side, the sales and shipment speed of paper companies slowed down in September, and most paper companies had high inventory levels, resulting in average market supply. However, the policies of large-scale paper mills have fluctuated, and the focus of transactions in the region has adjusted in different directions. Most paper mills in other regions remain stable and observe, and the trading atmosphere is average. Under the influence of this factor, downstream customers lack confidence in market transactions and are not proactive in stocking up on orders, resulting in fewer new transactions.

Subsequently, some paper mills in the corrugated paper market issued notices of shutdown and maintenance before and after the National Day holiday, and some paper mills stopped their equipment for technical upgrades, which led to a decrease in the short-term industry operating load rate. But with the end of the Mid Autumn Festival and National Day stocking season, downstream finished paper sales may continue to be weak, and the inventory reduction of corrugated paper is still relatively slow.

In terms of demand, there was insufficient follow-up on new orders from downstream packaging factories in September, and there were doubts about the increase in demand in the later period. The procurement of raw paper urgently needed follow-up, and there was insufficient support on the demand side. As the Mid Autumn Festival orders come to an end, the market is in a temporary off-season for consumption, and business confidence in the demand for Jinjiu is weak, resulting in insufficient release of downstream effective demand. In addition, as the end of the month approaches the National Day holiday, some downstream packaging factories will shut down for vacation, reducing the consumption of corrugated paper. Some paper mills will also implement price reduction promotions, while downstream packaging factories mostly purchase according to their urgent needs based on order situations.

The paper analyst from SunSirs believes that the current trend of corrugated paper supply and demand is weak, but the reduction in demand is greater than that in supply. In addition, the continuous release of shutdown letters from paper mills during the National Day holiday has led to expectations of a decrease in waste paper prices, and there is currently no positive support for corrugated paper prices on the cost side. It is expected that the price of corrugated paper will remain stable and wait and see in the short term.

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