Base Paper Falls for a Fourth Straight Time: the Corrugated and Containerboard Market Is Hard to Call Bullish in the Short Term

1. Price adjustment situation and mainstream paper mills' quotations

Latest price adjustments on March 25:

Liaoning Xingdong Paper lowered recycled containerboard prices, with kraft liner down 100 yuan/ton and recycled liner down 150 yuan/ton.

Liaoning Fushun Hupo Paper lowered containerboard prices by 150 yuan/ton.

Hebei Baoding Dingtai Paper lowered corrugated paper quotations by 200 yuan/ton.

Henan Xuchang Hongwei (Henan Yilian Recycling Resources) lowered corrugated paper prices by 100 yuan/ton and containerboard prices by 100 yuan/ton.

Henan Hengli Paper lowered corrugated paper prices by 100 yuan/ton.

Fujian Zhangzhou Huafa Paper lowered corrugated paper prices.

Fujian Zhangzhou Yingsheng Paper lowered corrugated paper prices.

Jiangsu Yancheng Kaisheng Paper lowered corrugated paper prices.

Jiangsu Danyang Changfeng Paper lowered containerboard quotations and corrugated paper quotations.

Hubei Jinfenghuang Paper lowered corrugated paper quotations.

Summary of base paper price adjustments on March 24, 2020

Jiangsu Taicang Nine Dragons lowered corrugated paper by 100-200 yuan/ton.

Shandong Tiandiyuan Paper lowered corrugated paper by 200-300 yuan/ton.

Jiangsu Wuxi Rongcheng lowered recycled containerboard by 300 yuan/ton.

Zhejiang Yiwu Yinan Paper lowered grade containerboard by 100 yuan/ton.

Zhejiang Yiwu Yinan Paper lowered high-strength corrugated paper by 150 yuan/ton.

Tianjin Nine Dragons Paper lowered corrugated paper prices by 150 yuan/ton from today.

Jiaxing Shanying International (Ji'an) lowered containerboard by 300 yuan/ton.

Tianjin Nine Dragons Paper lowered Nine Dragons corrugated paper by 150 yuan/ton and kraft liner by 100 yuan/ton.

Dongguan Nine Dragons Paper's corrugated paper prices are temporarily stable. Current ex-factory tax-inclusive cash prices in the Dongguan area: Nine Dragons corrugated paper 50g quoted at 4,160 yuan/ton, 60g at 3,860 yuan/ton, 70g at 3,760 yuan/ton, 85g at 3,530 yuan/ton, 90g at 3,480 yuan/ton, 100g at 3,430 yuan/ton, 110-180g at 3,330 yuan/ton;

Hailong corrugated paper 100g at 3,390 yuan/ton, 110-180g at 3,290 yuan/ton; Dilong corrugated paper 50g at 3,960 yuan/ton, 70g at 3,610 yuan/ton, 85g at 3,430 yuan/ton, 90g at 3,380 yuan/ton, 100g at 3,290 yuan/ton, 110g/140g at 3,190 yuan/ton. (Quotation of March 26)

Dongguan Nine Dragons Paper's kraft liner prices are temporarily stable. Current ex-factory tax-inclusive cash prices in the Dongguan area: Nine Dragons kraft liner 126g quoted at 4,780 yuan/ton, 140-175g at 4,650 yuan/ton, 190-250g at 4,600 yuan/ton, 300g at 4,530 yuan/ton, 337g/440g at 4,980 yuan/ton; Hailong kraft liner 140-175g at 4,180 yuan/ton, 230g/250g at 4,080 yuan/ton, 300g at 4,180 yuan/ton; Dilong kraft liner 110g at 3,660 yuan/ton, 120g at 3,610 yuan/ton, 130g/140g at 3,550 yuan/ton, 150g at 3,480 yuan/ton, 160-230g at 3,430 yuan/ton. (Quotation of March 26)

Hubei Jinfenghuang Paper's ex-factory tax-inclusive cash reference prices for corrugated paper: high-strength corrugated paper 65g at 3,950 yuan/ton, 75g at 3,800 yuan/ton, 85g at 3,700 yuan/ton, 100g at 3,400 yuan/ton, 110g at 3,350 yuan/ton, 120-170g at 3,300 yuan/ton; ordinary corrugated paper 55g at 3,900 yuan/ton, 60g at 3,800 yuan/ton, 70g at 3,700 yuan/ton. Cargo is mainly sold to Hubei, Hunan, Jiangxi, Jiangsu and Zhejiang, etc. Cash settlement preferred. (Quotation of March 26)

Shandong Tiandiyuan Paper's ex-factory tax-inclusive cash prices for high-strength corrugated paper for ordinary customers: high-strength corrugated paper 110g at 3,100 yuan/ton, 120-140g at 3,000 yuan/ton. Acceptance prices are 60 yuan/ton higher on this basis. Cargo is mainly sold to Shandong, Henan and Hebei, etc. (Quotation of March 26)

Shanying Paper's high-strength corrugated paper adjusted prices: tax-inclusive wire transfer delivered prices for ordinary customers in the Hangzhou-Jiaxing-Huzhou area:

High-strength corrugated paper 100g at 3,650 yuan/ton, 110g/120g at 3,550 yuan/ton, 130g/140g at 3,450 yuan/ton. (Quotation of March 25)

Jiangxi Kemei Paper's ex-factory tax-inclusive cash reference prices for corrugated paper: high-strength corrugated paper 90g at 3,500 yuan/ton, 100g at 3,400 yuan/ton, 110g at 3,300 yuan/ton, 120-140g at 3,200 yuan/ton. (Quotation of March 25)

Hubei Jinfenghuang Paper is taking orders normally for corrugated paper. Current ex-factory tax-inclusive cash reference prices: high-strength corrugated paper 65g at 3,950 yuan/ton, 75g at 3,800 yuan/ton, 85g at 3,700 yuan/ton, 100g at 3,400 yuan/ton, 110g at 3,350 yuan/ton, 120-170g at 3,300 yuan/ton; ordinary corrugated paper 55g at 3,900 yuan/ton, 60g at 3,800 yuan/ton, 70g at 3,700 yuan/ton. (Quotation of March 25)

Shandong Sun Honghe Paper is taking orders normally for corrugated paper. Ex-factory tax-inclusive cash reference prices: high-strength corrugated paper 50g at 4,410 yuan/ton, 55g at 4,210 yuan/ton, 60g at 4,110 yuan/ton, 70g at 3,910 yuan/ton, 80g at 3,810 yuan/ton, 85g at 3,710 yuan/ton, 90g at 3,610 yuan/ton, 95g at 3,510 yuan/ton, 100g at 3,460 yuan/ton, 105g/110g at 3,360 yuan/ton, 120g at 3,310 yuan/ton, 130g/140g at 3,260 yuan/ton, 160g/170g at 3,210 yuan/ton. (Quotation of March 25)

Quanzhou Nine Dragons Paper's kraft liner implemented new prices. Current tax-inclusive ex-factory wire transfer prices in the Quanzhou area: Nine Dragons kraft liner 140-170g at 4,750 yuan/ton; Hailong kraft liner 130g at 4,400 yuan/ton, 170g at 4,350 yuan/ton; Dilong kraft liner 100g at 3,900 yuan/ton, 130g/140g at 3,800 yuan/ton. (Quotation of March 24)

Liansheng Paper (Longhai) implemented new containerboard prices. Ex-factory tax-inclusive wire transfer prices: premium kraft liner 160g at 4,750 yuan/ton, 200g/230g at 4,700 yuan/ton; Grade A/140g/170g at 4,300 yuan/ton, 220g at 4,250 yuan/ton; Grade A2/100g at 4,050 yuan/ton, 110g at 3,950 yuan/ton, 120g at 3,900 yuan/ton, 130g/140g at 3,750 yuan/ton, 170g/190g/200g at 3,650 yuan/ton; Grade A3/100g at 3,850 yuan/ton, 130g at 3,600 yuan/ton, 160g at 3,500 yuan/ton; Grade T/80g at 3,750 yuan/ton, 90g at 3,650 yuan/ton. (Quotation of March 24)

Jiangxi Lee & Man Paper implemented new containerboard prices. Ex-factory tax-inclusive cash reference prices: containerboard Grade H 150g at 4,950 yuan/ton, 170g/200g/230g at 4,850 yuan/ton; Grade Q 130-140g at 4,000 yuan/ton, 160-190g at 3,950 yuan/ton; containerboard Grade B 90g at 4,150 yuan/ton, 100g at 4,050 yuan/ton, 110g at 3,950 yuan/ton, 120g at 3,850 yuan/ton. (Quotation of March 24)

Chongqing Lee & Man Paper implemented new containerboard prices. Current tax-inclusive ex-factory wire transfer reference prices: Grade H premium kraft liner 150g/175g at 4,950 yuan/ton, 200g/230g/280g at 4,900 yuan/ton; Grade N 140g at 4,550 yuan/ton, 160g/170g at 4,500 yuan/ton, 200g/250g at 4,450 yuan/ton; Grade Q 130g/140g at 4,100 yuan/ton, 160g/170g/190g at 4,050 yuan/ton; Grade B 80g at 4,250 yuan/ton, 90g at 4,150 yuan/ton, 100g/110g at 4,050 yuan/ton, 120g at 3,950 yuan/ton, 130g/140g at 3,900 yuan/ton, 160g/170g at 3,850 yuan/ton. (Quotation of March 24)

Leshan Nine Dragons Paper's current tax-inclusive ex-factory wire transfer reference prices for corrugated paper: high-strength corrugated paper 60g at 4,250 yuan/ton, 70g at 4,000 yuan/ton, 80g/90g at 3,950 yuan/ton, 100g at 3,800 yuan/ton. (Quotation of March 23)

Chongqing Nine Dragons Paper's current ex-factory tax-inclusive wire transfer reference prices for corrugated paper in the Chongqing area: Nine Dragons corrugated paper 110g at 3,800 yuan/ton, 120-160g at 3,650 yuan/ton; Hailong corrugated paper 110g at 3,700 yuan/ton, 120-160g at 3,600 yuan/ton; Dilong corrugated paper 110g at 3,650 yuan/ton, 120-160g at 3,550 yuan/ton. (Quotation of March 23)

1. Historical record of four consecutive base paper price cuts

On March 13, Nine Dragons Paper cut base paper prices at its bases for the first time, by 50-150 yuan/ton, formally beginning the decline in the corrugated and containerboard market.

On March 17, Nine Dragons Paper cut base paper prices at its bases for the second time, by 150-250 yuan/ton, and the decline in the corrugated and containerboard market continued.

On March 21, Nine Dragons Paper cut base paper prices at its bases for the third time, by 100-200 yuan/ton, and the corrugated and containerboard market fell repeatedly, with prices now basically level with the closing prices before the holiday.

On March 24, Nine Dragons Paper cut base paper prices at its bases for the fourth time, by 100-150 yuan/ton, and the corrugated and containerboard market suffered a severe decline, with prices now below the closing prices before the holiday.

From March 13 to now, in just over ten days, the base paper prices of Nine Dragons Paper's various bases have been cumulatively reduced by 500-750 yuan/ton, a decline of up to 17%.

1. Cumulative record of several price cuts by small and medium-sized enterprises
2. After four rounds of decline, will the market continue to collapse people, or will it stop falling?

Limited recovery in terminal demand: domestic terminal demand is in a recovery stage, with limited short-term volume growth; constrained by the continued fermentation of the public health situation, the export market will remain sluggish, and indirect exports of base paper will be significantly suppressed.

Raw material costs hard to support: waste paper packing stations continue to panic, prices continue to slide, and support for base paper is weak.

Base paper oversupply: the operating rate of domestic paper enterprises is around 50%, down 30% year-on-year. Although output has fallen considerably compared with last year, due to insufficient downstream demand, paper enterprises' shipments are poor and inventories have increased notably. It is reported that the inventory days of large-scale paper enterprises have reached 25-30 days, with average inventory days up 16% from last year; in addition, the Hubei area has recently resumed work and production one after another, further increasing supply, and in the short term the phenomenon of oversupply of finished paper is relatively prominent.

Industry participants' mentality collapsing: from upstream to downstream in the finished paper market, industry participants generally take a bearish view.

In summary, there are currently many bearish factors in the market, and the corrugated containerboard market can hardly be described as improving in the short term. Prices will continue to decline, with a further downside of 200-300 yuan/ton.

——This article is reprinted from China Packaging Network (pack.cn), original link: http://news.pack.cn/show-354973.html