(www.chinapaperonline.com) Regardless of the latest drops by RMB50 per metric tons in price across the country, delivered price of locally baled premium OCC to mainstream containerboard mills in China was summarized at about RMB2,220 per metric ton in the 1st Quarter 2019. This was up slightly from the last quarter 2018, though down nearly 5% from the first quarter 2018!
Market observers saw a number of factors driving the changes of price from the start of the New Year. Along with the positive factors, including the progress in US-China trade talks, new capacity start-ups such as the 750,000mtpy containerboard mill at Bohui Paper in upper China’s Shandong Province that increased OCC demand and the announcement by the Chines government to lower the value-added tax by 3 percentage points effective from April 1st as part of the government’s efforts to boost the economy, the negative factors remained, such as the significant rebound in China’s recycled pulp imports in the first two months of 2019 to nearly 60,000 metric tons (+414% from that of 2018) and the continuous growth of linerboard imports to nearly 260,000 metric tons in the first-two months of 2019 (+40% from that of 2018).
In spite of the existing challenges, more observers are expecting that China’s OCC market will stay active and price will rise moderately in the 2nd Quarter, given the fact that containerboard mills will gear up running in response to traditional high box cutting season from April for both domestic and export packaging needs. In fact, a number of mainstream containerboard mills in Southern China began to pay as much as RMB50 per metric ton more to secure premium OCC deliveries at the last week of March, according to market sources.