According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of corrugated paper steadily increased in August after stopping the decline. On August 29th, the average ex factory price of 140g corrugated paper was 2,610 RMB/ton, an increase of 0.46% compared to the average price of 2,598 RMB/ton on August 1st.
In terms of upstream raw materials, the price of waste paper in Zhejiang region increased more than decreased in August, and the overall price showed an upward trend. On July 29th, the average purchase price of A-grade waste yellow cardboard in Zhejiang region was 1,513 RMB/ton, an increase of 2.16% compared to the average price on August 1st. In mid to early August, most of the waste paper is in the off-season for recycling, and the amount of recycled yellow cardboard is running at a low level. In addition, the reluctance of packaging stations to sell has increased, resulting in a decrease in the amount of waste yellow cardboard received by paper mills. With the early start of the Mid Autumn Festival stocking season, paper mills have a strong intention to increase their waste paper reserves. Some paper mills have increased their plans to purchase waste yellow cardboard, resulting in an upward trend in waste paper prices.
In late August, the price of waste paper remained stable, but towards the end of the month, the price loosened and declined. Due to the early release of the Mid Autumn Festival stocking season, the demand for finished paper in September may remain flat, 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 leads to a weak downward trend in waste paper prices.
On the supply side, the paper mill's operating load rate remained stable in August, and the spot supply was relatively sufficient. At the beginning of the month, multiple paper mill bases issued price increase notices, but due to inconsistent policy implementation, most paper mills stabilized their prices and shipped, resulting in a narrow shift in the focus of transactions in some areas of the market. However, the sales and shipment speed of paper companies has not accelerated, and most paper companies have high inventory levels, resulting in a flat market supply.
Subsequently, although the bullish atmosphere in the market was relatively strong, most small and medium-sized paper mills remained stable and watched, with little change in the market transaction range and only a slight increase in prices. However, due to the varying price policies of paper mills in terms of market size, the implementation of price increase policies in northern bases, and the downward adjustment of some specifications in Dongguan bases, price trends have differentiated between different regions.
In terms of demand, the market demand in August will gradually transition from the off-season to the peak season, but there will be insufficient demand from end-users, and downstream packaging factories will have mediocre order performance. Some manufacturers will replenish their raw paper inventory appropriately according to the order situation, and the market will have a strong wait-and-see atmosphere. But with the advance stocking of goods during the Mid Autumn Festival and National Day holidays, there is a positive expectation for demand side inventory. With the rise of paper mills, some downstream packaging factories may supplement their inventory appropriately, which provides some support for paper prices on the demand side.
The paper analyst of SunSirs believes that the current price of waste paper has returned to a downward trend, which weakens the cost support for corrugated paper. Although there is an expectation of improvement in domestic demand due to the impact of holidays, the fierce competition in the domestic market and insufficient follow-up of effective demand at the end have led to a continued pattern of oversupply in the market. It is expected that the price of corrugated paper will remain stable and wait and see in the short term.
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