According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of corrugated paper in December experienced a sustained decline after a brief stable rise. On December 29th, the average ex factory price of 140g corrugated paper was 2,970 RMB/ton, a decrease of 7.48% compared to the average price on December 1st.

In terms of upstream raw materials, the price of waste paper in Zhejiang Province continued to decline and showed a cliff like trend in December. After stabilizing the downward trend, it rose again. On December 29th, the average purchase price of A-grade waste yellow board paper in Zhejiang Province was 1,740 RMB/ton, a decrease of 13.17% compared to the average price on December 1st. In early December, although the amount of waste paper received by paper mills was average, due to the resistance of downstream finished paper market price increases and the hidden loosening of local market prices, some paper mills lacked confidence in the waste paper market and appropriately lowered the purchase price of waste paper. In mid to late December, leading paper companies exercised their pricing power and adopted a strategy of continuous rapid decline, causing the waste paper market to see a warming atmosphere and a significant increase in the rate of price decline. As prices clear, the market supply and demand are readjusted, and prices are returning to an upward trend towards the end of the month.

Supply side: In early December, the inventory of large-scale paper mills was generally low, and some enterprises still have the intention to raise prices. But as the paper mills gradually resume production after shutdown for maintenance, some companies in the market have seen a slight increase in inventory, and supply pressure has become apparent. However, large-scale paper companies continue to release price increase plans, which temporarily supports prices, resulting in a slight increase in corrugated paper prices. The significant drop in waste paper prices in late December weakened cost support, and paper company inventories continued to rise slightly. Market sentiment lost control, and corrugated paper prices followed suit and fell.

On the demand side: In early December, the rebound in export demand and the expansion of the manufacturing industry have to some extent driven the demand for corrugated paper. However, downstream packaging factories have slowed down their procurement pace due to sufficient inventory in the early stage, and tend to focus on on-demand procurement, resulting in weak demand or limiting the upward trend of prices. The overall performance of downstream orders in late December was poor, with low enthusiasm for raw paper procurement and mainly consuming previous inventory. In addition, the price adjustment strategy of large-scale paper mills has shifted from raising prices to maintaining prices, and the policy of maintaining prices has declined beyond expectations, exacerbating the bearish atmosphere in the market. Influenced by the sentiment of buying up rather than buying down, the raw paper procurement of packaging factories is even less active.

The paper analyst of SunSirs believes that as the end of the month approaches, the price of wastepaper has stopped falling and rebounded, and the cost of corrugated paper has played a supporting role. However, the price increase letter from the leading paper mill has been released again, and the market is temporarily stable and waiting. It is expected that the price of corrugated paper will remain weakly stable in the short term.

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