Leading Paper Mills Offer 100 Yuan/Ton Discounts: Where Will the Paper Market Head in September?

Recently, news came from several bases of Nine Dragons Paper that base paper prices would be discounted by 100/tonne, for the period from August 27 to August 31. Among them, Dongguan Nine Dragons Paper offered a discount of 100/tonne on kraft linerboard, high-strength corrugated paper and recycled kraft linerboard, while Quanzhou Nine Dragons Paper offered a discount of 100/tonne on recycled kraft linerboard and high-strength corrugated paper.

Besides Dongguan Nine Dragons and Quanzhou Nine Dragons, some products of large paper companies such as Guangdong Lee & Man Paper, Fujian Longhai Liansheng Paper and Dongguan Jinzhou Paper also had varying degrees of discounts. A large number of packaging paper companies shipped at a discount at the tail end of August, yet the discount period was relatively short. What signals does this bring to the paper market in September?

Judging from the recent price trend of packaging paper, from early to mid-August most paper mills basically carried out one or more rounds of price increases, but after entering late August, paper prices ran steadily with almost no fluctuation. As downstream demand weakened, on August 27 some paper companies directly announced a five-day discount, lasting until the last day of August.

September is a traditional peak season for the papermaking and packaging industries; judging from past years, paper prices basically moved upward. Some industry insiders predict that waste paper prices will rise first in early September, and base paper prices will begin to rise in mid-September. From this perspective, this round of discounted shipments by paper mills looks more like digesting earlier increases in order to better raise prices in September.

After all, once September arrives, holidays such as the Mid-Autumn Festival and National Day gradually increase, which helps stimulate end-consumer demand and in turn drives up base paper consumption. Perhaps precisely because of expectations of a better market, producers of specialty paper, ivory board and white board paper issued their September price increase letters early, announcing increases of 200-300/tonne.

On August 27, Shanying Paper Sales Co., Ltd. issued a price increase letter stating that from September 1, the Spruce fully wood pulp extensible paper, Spruce kraft paper, Metasequoia extensible paper and Metasequoia kraft paper produced at its Guangdong base would be raised by 300/tonne uniformly on top of existing prices. According to the author, Guangdong Shanying's kraft paper and extensible paper series all belong to specialty paper, mainly used to produce cotton swab sticks, straws, paper bags and other products.

From August 23 to August 26, the four giants of the ivory board industry - APP Golden Paper, Chenming Group, Wanguo Paper and Bohui Paper - successively announced that their ivory board products would rise by 200/tonne. Among them, Wanguo Paper and Chenming Group raised prices on August 26 and August 25 respectively, while APP Golden Paper and Bohui Paper both raised prices from September 1.

And earlier, on August 20, Dongguan Jianhui Paper had already issued a price increase letter stating that the selling prices of coated grey-back white board of all grades would rise by 50/tonne from August 30; and from September 15, a further 50/tonne would be added on top of the August 30 price. The cumulative increase was 100/tonne.

It can be seen that although corrugated paper and linerboard companies and specialty paper, ivory board and white board paper companies currently differ somewhat in pricing, their price trends over the coming period are roughly the same. For the former, discount measures were implemented from August 27 to August 31, but what about after September? For the latter, announcing increases in advance to take effect at that time is more direct.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378124.html