SunSirs: The Supply and Demand of Corrugated Paper has Eased, and the Price Increase in November Continues

According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of corrugated paper continued to rise in November, and the overall supply and demand relationship slightly eased, which is favorable for price operation. On November 28th, the average ex factory price of 140g corrugated paper was 2,668 RMB/ton, an increase of 2.46% compared to the average price of 2,604 RMB/ton on November 1st.

In terms of upstream raw materials, the price of waste paper in Zhejiang Province showed an upward trend in November, and domestic waste paper prices also showed an upward trend. On November 28th, the average purchase price of A-grade waste yellow cardboard in Zhejiang Province was 1,604 RMB/ton, an increase of 6.72% compared to the average price on November 1st. The reason for the increase in the price of waste yellow cardboard in November is partly due to weak domestic commodity consumption and cautious recycling by packaging stations, resulting in a decrease in the supply elasticity of waste yellow cardboard, which is relatively scarce; On the other hand, as the market enters the peak season for packaging paper demand, the operating load rate of paper companies has increased, thus increasing their intention to stock up on waste yellow cardboard. Under the pattern of supply-demand imbalance, the price of waste paper has risen strongly.

On the supply side: In early November, some paper mills successively issued notices of shutdown and maintenance, which reduced the inventory pressure of most paper mills and eased the oversupply of corrugated paper in the market. In addition, some bases of large-scale paper mills still have price increase plans, providing favorable support for further market price increases. Subsequently, the enthusiasm of small and medium-sized paper mills to keep up with the rise was still acceptable, and the inventory level of paper enterprises was not high, which drove up paper prices.

The continuous rise in the corrugated paper market in late November supported the recovery of industry profits. The stable production of upstream paper mills, coupled with the increase in demand, 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 remained stable. The decrease in enterprise inventory has slightly eased the supply-demand relationship, contributing to price increases.

On the demand side: With the rise in corrugated paper prices, the order volume of cardboard factories continues to increase, leading to an increase in procurement volume. The market has entered the peak season, with downstream market orders gradually increasing and paper mill inventory decreasing. In the atmosphere of buying up and not buying down, downstream procurement is more active. In addition, 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 a demand for replenishing inventory.

The paper analyst from SunSirs believes that there are still price increase letters from large-scale paper mills, and their attitude towards raising prices is relatively clear, which still provides some support for price increases. The production and sales situation is good, especially with low inventory in most paper mills, which supports the market prices to remain high. However, there is still a possibility of an increase in the price of raw material waste paper, and the cost side is favorable for the operation of raw paper prices. It is expected that the short-term rise in corrugated paper prices may slow down.

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