SunSirs: October Saw a Sustained Rise in Wastepaper and Corrugated Paper in China, with Short-term Fluctuations and Consolidation

According to the monitoring of the Commodity Market Analysis System of SunSirs, in October, the prices of wastepaper in the Zhejiang region of China were mixed, fluctuating and rising. On October 27th, the average purchase price of A-grade waste yellow cardboard in Zhejiang Province was 1,604 RMB/ton, an increase of 1.65% compared to the average price of 1,578 RMB/ton on October 1st. The price of corrugated paper first rose and then stabilized. On October 27th, the average ex factory price of 140g corrugated base paper was 2,870 RMB/ton, an increase of 1.06% compared to the average price of 2,840 RMB/ton on October 1st.

By observing market changes, it can be seen that in early October, the price of wastepaper remained stable and fluctuated slightly, while the overall domestic market showed a slight upward trend. The rising atmosphere of the raw paper market is good, and the price of wastepaper shows a trend of rising. In terms of supply, with the end of the National Day holiday, the recycling volume of packaging plants may increase, and the market inventory level is still at a high level. In terms of demand, the production of paper mills has gradually stabilized after the holiday, so more wastepaper is purchased according to demand, and the purchase price of wastepaper is basically adjusted according to one's own needs.

In late October, the price of wastepaper showed a mixed trend of ups and downs. On the supply side, the market has recently entered a peak season for retail consumption, and the upcoming e-commerce festival and Christmas have provided some positive support for terminal consumption. The amount of wastepaper recycling may be sufficient, which is conducive to the high supply operation of the wastepaper market. On the demand side, there is new production capacity in the downstream finished paper market, coupled with fewer downtime and maintenance plans, and the consumption of wastepaper may show a growth trend.

By observing market changes, it can be seen that the upward trend of corrugated paper prices in early October is still ongoing, and the price increase is mainly supported by the improvement of market supply and demand relationship and low inventory factors of paper companies. In terms of supply, the operating load rate of upstream paper mills has remained stable, coupled with the recent production of new corrugated paper devices, products have gradually entered the market, and the overall market spot supply has increased. The increase in supply will have a hedging effect on demand growth, forming a certain negative impact on the corrugated paper market. On the demand side, the current inventory of raw paper in downstream packaging factories has increased to a mid to high level. If the follow-up of terminal orders is slow or inventory is mainly consumed, there will be some inhibition on the continued rise of paper prices.

In late October, the price of corrugated paper returned to a stable state. Due to the continuous upward trend of corrugated paper prices in the early stage, paper mills have basically entered the stage of price digestion, with prices mostly stabilizing. With the end of the festival, terminal orders have weakened, downstream packaging factory orders have declined, and market demand is weakening. The continued upward movement of paper prices is slightly insufficient. The market supply and inventory are showing an increasing trend, while new orders have not yet been initiated, and the demand side orders have shown a phased weakening. Downstream packaging factories have limited demand for subsequent procurement with a certain amount of raw paper inventory.

Paper analysts from SunSirs believe that the current upward momentum in the prices of wastepaper and corrugated paper is slightly weak, and the wastepaper market is basically adjusting purchase prices according to demand. The trend of the corrugated paper market is weakening, and there is a strong wait-and-see atmosphere in the market. Currently, the production and operation of upstream paper mills are stable, while downstream orders are insufficient to follow up, resulting in increasing pressure on both supply and demand. It is expected that the prices of wastepaper and corrugated base paper may fluctuate and consolidate in the short term.

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