Since the first day after the China market reopened from the May Day break, recovered paper price has begun to show quick ups and downs. At the 2nd week of May, for example, buyers in various parts of China joined tier-one buyers to pay RMB50/mt or even more for deliveries of locally baled prime OCC and other bulk grades to their mills and then lowered their payment by RMB50/mt by the 3rd week of the month. As a result, price of prime OCC hanged around RMB1,800/mt in Eastern China and RMB1,900/mt in Southern China.

Meanwhile, price of containerboard and other grades of paper and board was also back to a short-rise direction. Quite a few mills added as much as RMB100/mt to their paper and board prices. Having insignificant variance by regions and product substances, prices of kraft-top linerboard and prime medium are now quoted around RMB4,000/mt in China. By May 12th, however, market saw no further progress in price increases, or in fact heard new reports on price cuts by about RMB50/mt from large producers in Eastern and Southern China markets.

More market observers now agree that the China market is in a new norm, in which quick cash flows becomes the key attention of recovered paper balers, paper and board producers and converters. Rather than changing monthly by tradition, price is now subject to weekly rise and falls in the market, reflecting market players’ care and response to short-term earnings, rather than long-term returns. The current price reactivation in recovered paper, but wariness in finished paper and board prices are driven by refilling of fiber stocks at mills and paper/board stocks at the converters, plus the push to pass additional cost such as resumption of toll-fee at highways. While waiting for the official report from China Paper Association (CPA) on industry performance, market analysts projected that industry earnings in 2019 could reduce further from 2018, regardless of the minor growth in paper and board production during the year. Gone were the good-old days when earnings joined production growth in double digits! In this sense, people will not be surprised to see price drops in the 2nd half of May, pending substantial improvement in domestic paper and board consumption and export orders.