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RCP, Board & Box Prices Soaring In China
2020-03-02 09:07chinapaperonline.com
(www.chinapaperonline.com) Urged by the government, paper, paperboard and converters are joining manufacturers of all other industries in China to slowly and cautiously resume their business operation, against multiple challenges, including shortage in workforce, fiber supply and logistics service.

As a result of strong demand for corrugated boxes, especially for disaster relief efforts, containerboard manufacturers, led by large companies in Eastern and Southern China, began to stock more recovered paper. Price of locally baled OCC has thus gone up more than 100/mt (US$14.29/mt) since the reopening of the market in the 3rd week of February. Accordingly, mainstream containerboard producers have also announced to add not less than RMB200/mt (US$28/mt) to their sales price. Initial response from the box converters was dismay and helpless in view of the challenges confronting the industry. For the converters, resumption of containerboard production at mills is good news on the one hand, having new supplies of board for box production. On the other hand, however, price increases right after the holiday reopening of the market is rare by tradition and will add more uncertainties on cost to converters, those small and independent box makers in particular, for the rest of the year. Anyhow, most box converters in the country have already billed the rising cost to their converted board or boxes prices by 5-10% from January. Since February 21st, price of single or double wall corrugated board in Eastern China has gone up RMB10 (or US$1.43) cents/square meter for example.

At the moment, market analysts are closely watching the developments before making forecast or analysts on the short-term and long-term impacts of the industry, which are largely subject to the fallouts of the coronavirus and the government’s efforts to revive the economy. But more market players fear that the current price rise may wane after more production resumption in containerboard mills and box converters. Long-term, however, the short supply in fiber will tighten the market under strong demand for packaging boxes for nationwide economic revival activities from the 2nd Quarter of 2020.

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