SunSirs: China Corrugated Paper Continues to Rise, Short-term Gains may Slow Down

According to the monitoring of the Commodity Market Analysis System of SunSirs, the upward trend of corrugated paper prices this week is still strong. On November 21st, the average ex factory price of 140g corrugated paper was 2,648 RMB/ton, an increase of 0.91% compared to the average price of 2,624 RMB/ton on November 17th.

In terms of upstream raw materials, the price of waste paper in Zhejiang region continued to rise this week. The price of waste paper in domestic paper mills has risen comprehensively. On November 21st, the average purchase price of A-grade waste yellow board paper in Zhejiang region was 1,561 RMB/ton, an increase of 2.23% compared to the average price on November 17th. Recently, the demand for waste yellow cardboard in the market has gradually increased, and the upward trend in purchasing prices for paper mills is relatively strong. The purchasing prices for large-scale paper mills have steadily increased, and surrounding paper mills have a high willingness to follow suit. In addition, the inventory level of waste yellow cardboard in paper mills has slightly decreased, so paper mills are more active in purchasing waste paper.

On the supply side: The recent continuous rise in the corrugated paper market has supported the recovery of industry profits. The stable production of upstream paper mills, coupled with the growth of demand, has further optimized the market supply and demand structure, promoting the enthusiasm of paper mills to start production. The operating load rate of upstream paper mills and the market spot supply have remained stable. In addition, the overall increase in waste paper prices this week has also supported the rise in corrugated paper prices in terms of costs.

On the demand side: The current demand for corrugated paper is performing well. With the arrival of holidays such as New Year's Day and Spring Festival at the end of the year, there is an expected increase in terminal orders in the short term. Downstream packaging factories are accelerating their consumption of corrugated paper, and their enthusiasm for replenishing inventory is increasing. Some downstream packaging factories still have replenishment needs.

In terms of the market, from October to November, large-scale paper mills continued to issue price increase notices, leading to a rise in bullish sentiment in the market, and there are still further upward expectations after November 20th. Therefore, there is a strong bullish sentiment in the market, which drives downstream packaging factories to increase inventory replenishment, while upstream paper mills have good shipment performance, which is conducive to maintaining a strong operating trend in the market.

The paper analyst of SunSirs believes that the current demand for corrugated paper market is stable and improving, and the supply-demand relationship in the market is expected to further improve. In addition, the cost side trend is relatively strong, and market favorable factors still dominate. However, considering the gradually sufficient inventory in the terminal market, it is expected that the short-term price increase of corrugated paper may slow down.

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