Beginning from the 2nd week of March, China's recovered paper market showed signs of weariness from consistent price rise since the start of the new year. By the 3rd week, there was a general dip by RMB30-50/mt in price affecting all bulk grades and in some regional markets, price for OCC lost as much as RMB100/mt. By now, mainstream paper and board producers in Eastern and Southern China were lowering their payment to about RMB2,500/mt for prime OCC at delivered terms. For old books, payment fell to about RMB2,100/mt and for sorted mixed paper, payment was down below RMB2,000/mt.

While debating whether this is a short dip before a new dash forward or the beginning of a serious decent from its peak, most market analysts agree that recovered paper market and the pulp and paper market as a whole really need a break to allow the country's paper industry and more importantly the downstream consumers of converted paper and board products to digest the changes which were spurred by the quick rises in price from fiber to paper/paperboard and from paper/paperboard to their converted products. Though not a key contributor to the country's GDP, China's paper industry nevertheless serves more than 60 sectors of the economy. Packaging paperboard in particular provides protection in shipping and warehousing and is in stronger demand from the country's domestic and export business. Official data showed China's corrugated box production declined -3.3% in 2020 from 2019 and average price of corrugating medium, which is made of 100% recovered paper in China, reached RMB4,111.1/mt, rising +2.92% in the first half of March 2021 from the same period of 2020. Greater demand vs. disappointed production will push consumers of corrugated boxes to add this near 3% new packaging cost into their product sales price. This may be most visible in e-commerce, which demands more and more corrugated boxes to serve its fast growing business. The good news is that falling OCC price is now impacting corrugating medium price, which gave up more than RMB50/mt starting from the 3rd week of March. However, such downward movement may not be favored by the containerboard producers who, including Nine Dragons and Shanying Paper, have announced maintenance downtimes from March to April in an apparent attempt to keep market steady from negative turns.