According to the monitoring of the commodity market analysis system of SunSirs, in 2023, the price of white cardboard has now decreased and then increased, showing a "V" trend. The highest price in January was 5,346.67 RMB/ton, followed by a continuous decline in prices. On July 11th, it reached its lowest point for the year, with a lowest price of 4,640 RMB/ton. After the low point, prices continued to rise. As of December 27th, the average market price for white cardboard 230g-400g in China was 5,240 RMB/ton, a 2% decrease compared to the market average price on January 1st.
The first round of market trends (January - June): In the first half of the year, the white cardboard market was affected by strong supply and weak demand, and prices continued to decline, with a decline of 12.59%.
In January of this year, which coincided with the Spring Festival holiday, small and medium-sized paper mills in Henan, Shandong and other places entered a state of shutdown for maintenance, and the shutdown basically lasted until the end of the month. Before the year, dealers mainly relied on recovering funds, and the price trend was relatively stable. After the RMBxiao (Filled round balls made of glutinous rice-flour for Lantern Festival) Festival, the trading in the white cardboard market gradually recovered. Although large-scale paper enterprises have successively issued price increase letters, most of the white cardboard market prices remain stable. With the recovery of downstream demand after the festival is less than expected, dealers' shipments gradually fade, and their enthusiasm for price increase is not high. In order to increase shipments, some paper enterprises' prices of white cardboard fell. The continuous weakening of market demand has led to slow shipments from distributors, accumulation of white cardboard inventory, and continuous price decline.
In April, large-scale paper companies started production relatively steadily, and some paper mills processed their inventory at low prices, resulting in increased resistance to white cardboard shipments and fierce competition in the market for low prices. In May, Fujian increased production capacity and started production, and trial paper began to flow into the market in the second half of the month. Therefore, the market price of white cardboard remained relatively stable in the first half of the month, while supply increased in the second half and market prices declined. As the off-season approaches in June, although the supply of white cardboard is mainly produced by large-scale paper mills, the inventory pressure on distributors increases, and the price of white cardboard continues to decline.
Second round of market (July - December): In the second half of the year, exports eased domestic sales pressure, and white cardboard stopped falling and rose, with a growth rate of 12.13%.
In early July, the price of white cardboard reached a low point for the whole year, accompanied by the shutdown of paper mills in Zhanjiang, Guangdong and the conversion of paper mills in Dongguan to white cardboard, resulting in a tightening of supply in the white cardboard market. In addition, some paper mills have improved their production and sales, and they will continue to issue letters notifying them of an increase in the price of white cardboard in August. The paper mills that shut down in August have gradually resumed production, but the situation of local shortage of goods has eased slowly. In addition, the price of wood pulp has risen, so the paper mills have successively raised the price of white cardboard.
Subsequently, in the market atmosphere of the peak sales season, some paper mills increased their production of white cardboard, steadily releasing new production capacity, increasing the supply of white cardboard, and increasing domestic demand supported by holiday orders. White cardboard production and sales flourished, and prices rose. Meanwhile, the export of white cardboard increased on a month on month basis. With the support of exports and the growth of food grade white cardboard consumption, the production and sales of white cardboard in paper mills have basically maintained a balance.
In November, the price increase letter from large-scale enterprises continued, and the continuity of market orders was good. Paper mills accelerated their shipments, and overall inventory fell to a low level. Confidence in price increases was strong, and in addition, white cardboard orders continued to be tight. Therefore, white cardboard maintained an upward trend. From late November to the end of December, the price of white cardboard returned to stability, and traders were gradually slowing down due to weakened terminal demand. Therefore, enterprise quotations were mostly stable. As the end of the year approaches, there is significant pressure for businesses to recover funds, coupled with weak demand, and price adjustments have limited stimulating effects on shipments. The market is mainly wait-and-see.
What will be the trend of white cardboard in 2024?
Supply side: The supply of white cardboard mainly includes the production capacity of the current period, the import level of the current period, and the inventory left over from the previous period. The most important aspect is the production capacity and utilization level of the current period, which is the capacity utilization rate, that is, the actual output of the current month is the output. In recent years, the production capacity of white cardboard has been increasing year by year, with an increase of 2.3 million tons in 2021 and 1.6 million tons in 2022.
In 2023, the domestic white cardboard production capacity will maintain a growth trend, with new production projects as the main focus. From January to September 2023, the total production of white cardboard in China was about 9.25 million tons, an increase of 13.2% year-on-year, and the monthly average production increased to over 1 million tons. Against the backdrop of an overall oversupply of white cardboard, changes in the supply side of white cardboard have become the dominant factor in the market. At the same time, the market is more influenced by factors such as cost side price fluctuations and cautious macroeconomic expectations.
Demand side: Downstream buyers of white cardboard are mainly distributors and color printing factories, with a large number of customers distributed throughout the country. However, the purchase volume of each downstream buyer is relatively small, and the bargaining power of downstream buyers is relatively weak compared to concentrated manufacturers. From 2023 to 2025, the new production capacity and suppliers of white cardboard will increase, and the market competition will be more competitive. Downstream brands will increase in the future, and the space for purchasing and negotiating white cardboard will be enhanced. The current market is bearish on demand for the Spring Festival, and the desire to withdraw funds and reduce inventory has increased. Some market operators are currently mainly observing and focusing on the growth of orders during the Spring Festival.
According to paper analysts from SunSirs, the rise and fall of white cardboard prices in 2023 are mainly influenced by market supply and demand factors. Against the backdrop of overseas demand recovering and strong growth in catering consumption, white cardboard demand has shown strong resilience. After almost all major planned production projects were launched this year, the overall supply and demand relationship in the industry remains relatively balanced, and paper mill inventories continue to be reduced.
If domestic demand further increases and external demand decreases, as well as consumption trends such as replacing ash with white and replacing plastic with paper continue, the demand for white cardboard is expected to continue to grow strongly in 2024. However, the newly added production capacity in the industry will still be at a relatively high level in 2024-2025, and the supply-demand balance may still be fragile. It is expected that the market price of white cardboard will remain strong in the short term. If the current market situation continues to be sluggish, the phenomenon of giving up profits and withdrawing funds in the market may increase, and the market price of white cardboard may decrease.
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