China’s paper market appears to gain momentum again. Like the previous round, recovered paper takes the lead. Since end-March, price of locally baled OCC has been on the rising path and gained as much as RMB500 per metric ton in 8 days! Reports of mounting difficulties in RCP supply and shipment from North America to China and the negative impacts on RCP exports from Japan to China under Japan’s latest announcement to suspend on-site inspection as a result of the state of emergency on anti-COVID-19 have all added to the tightness of RCP supply in the market and strength for RCP price increases in the China market. More market analysts now agree that RCP price will continue its upward rise in April, though the extent of the rebound is yet to learn.

On the packaging paperboard side, a number of mid-to-small board mills, in upper China in particular, have begun to raise price by as much as RMB100/mt, along with the price rebound of locally baled waste paper, which is understood as part of a desperate effort for survival. Large paperboard producers, however, have stood firm by either continuing their price cuts or taking downtimes.

More market observers are now looking at the containerboard sector. The RMB50-100 per metric ton price rise installed by mid-to-small producers in eastern and upper China seems to have little impacts on the market as large players remain quiet. Such cautiousness is partly explained by account of new capacity start-ups, including the trial runs of a 400,000/mtpy machine at Sunshine Paper in Shandong Province and a 200,000/mtpy machine at Zhongxing Paper in Jiangsu Province this month, and partly by concerns of demand in the 2nd Quarter, which by tradition is a low-season, under economic uncertainties that have affected both domestic and export box consumption.