Since late August, the wave of price increases initiated in China's white cardboard market has gradually translated into tangible profit recovery for enterprises. Data shows that as of December 11, the average domestic white cardboard price stood at CNY4,244 per ton, marking a 7.99% increase from the year's low recorded at the end of August. During this period, major paper mills including Shandong Bohui Paper Co., Ltd. (Bohui Paper) and Wannuo Paper Sunlight White Cardboard Co., Ltd. have issued four consecutive rounds of price increase notices, with cumulative hikes reaching CNY600 per ton. The first three rounds have largely been implemented, resulting in actual market price increases of CNY400 to 550 per ton for standard brands.

The core drivers behind the successive rounds of implemented price hikes include not only market demand but also the prolonged slump in paper prices and mounting cost pressures.

Since late August, while imported wood pulp prices have also shown an upward trend, the cost increase for white cardstock (2.51%) has significantly lagged behind the rise in paper prices, creating room for industry profit recovery.

Following the recent sustained price hikes by paper mills, whether the industry is profitable or loss-making depends on raw material conditions. Based on imported wood pulp costs, as of December 11, the white cardstock gross margin remained negative (-6.31%), but had narrowed significantly by 5.68 percentage points compared to late August. Considering the increasing substitution ratio of domestic pulp, large-scale enterprises have actually entered a state of marginal profitability.

Concurrently, paper mill inventories have remained near their annual low of approximately 13 days. Combined with delayed releases of new capacity, supply-side pressures have eased, providing support for price hikes.

However, current white cardstock prices remain near five-year lows, and market profitability is below the five-year average. This is why paper mills persist in raising prices, primarily aiming to improve the industry's operating environment. The industry's most fundamental challenge remains the long-standing issues of overall domestic overcapacity and intense market competition.

Under the current industry landscape, enterprises with self-produced pulp are gaining competitive advantages, and large-scale enterprises have turned losses into profits. Domestic white cardstock enterprises are increasingly sourcing raw materials locally, with newly added capacity generally equipped with chemical mechanical pulp and hardwood pulp lines, resulting in significant cost advantages.

Leading players' moves are particularly noteworthy. Bohui Paper recently announced plans to invest CNY1.701 billion to expand chemical wood pulp capacity, boosting self-sufficiency from 95,000 tons to 320,000 tons. The company stated this aims to “increase raw material self-sufficiency, reduce production costs, and enhance core competitiveness and market influence.”

Bohui Paper's move is not an isolated case. Since the beginning of this year, several leading companies, including Shandong Sun Paper Co., Ltd. and Xianhe Co., Ltd., have also been advancing upstream capacity construction for wood pulp, bamboo pulp, and other materials. Industry analysis generally holds that wood pulp accounts for about 70% of paper production costs, making the development of an integrated “pulp-paper” industrial chain a consensus strategy among leading enterprises to enhance profit resilience and ensure supply chain security. An industry insider noted that building a complete system from “forest” to “pulp” requires massive investment and a lengthy cycle, a capability currently possessed only by large enterprises.

Moreover, the packaging paper sector, including the white cardstock industry, is accelerating capacity expansion for high-value-added products. Leading paper companies are continuously innovating with differentiated specialty products.

Industry competition is shifting toward “value-based competition,” with companies prioritizing product quality, service responsiveness, supply chain stability, and industrial chain expansion over price wars. This trend may further widen the gap between leading enterprises and small-to-medium-sized businesses.

Overall, the white cardboard industry is pursuing dual strategies of “market-driven price increases” and “capacity expansion” to restore profitability and break through challenges. Kong Xiangfen anticipates that, supported by cost pressures and pre-holiday order expectations, low-price offerings are likely to decrease in the latter half of December, with prices maintaining an upward trajectory.

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