According to the monitoring of the commodity market analysis system of SunSirs, the price of paper mill wastepaper has stopped falling and rebounded this week. On March 19th, the average purchase price of A-grade waste yellow board paper in Zhejiang Province was 1,532 RMB/ton, an increase of 0.66% compared to the average price on March 15th. After stabilizing, the price of corrugated paper has shown an upward trend. On March 19th, the average ex factory price of 140g corrugated paper was 2,806 RMB/ton, an increase of 1.52% compared to the average price on March 15th.

Wastepaper supply side: After the Spring Festival, the concentrated supply of wastepaper on the market has been basically consumed. After mid March, the recycling volume of packaging stations continued to decline, and the market entered the traditional off-season. Due to the expectation of price increases, packaging stations are hoarding goods and waiting for price increases, resulting in a significant decrease in the amount of paper mill arrivals and supply shortages in some areas.

On the demand side of wastepaper: Currently, the operating load of paper mills across the country has rebounded, and the consumption of wastepaper has increased year-on-year. With the increase in finished paper prices, paper mills have proactively raised the purchase price of wastepaper in order to lock in profits and replenish inventory. In addition, with the upcoming May Day stocking peak, paper mills are preparing their inventory in advance, further driving up the demand for wastepaper procurement.

Corrugated paper supply side: This week, leading enterprises such as Jiulong have issued price increase letters, driving small and medium-sized paper mills to generally follow suit and creating a nationwide price increase atmosphere. Moreover, the operating load rate of the corrugated paper factory has increased, and the inventory of raw materials and finished paper in the paper factory is at a low level, with no shipping pressure and a basis for high prices. In addition, some paper mills in Hebei, Hubei and other regions are still undergoing maintenance or operating at low loads, coupled with environmental control measures, the effective supply of the country has not been fully released, and the supply of goods in core regions such as South China and East China is relatively tight.

On the demand side of corrugated paper: In mid March, packaging and printing enterprises basically resumed normal production. Corrugated paper, as the core raw material for packaging, saw a significant increase in the purchase volume of rigid demand compared to the previous month, supporting paper mill shipments. Due to the expected price increase caused by the rise in prices by leading companies, there has been a concentrated replenishment of inventory this week, resulting in an increase in transaction activity and a significant easing of supply and demand relations. And the market has entered the May Day holiday stocking cycle ahead of schedule, with some large packaging factories stocking up in advance, further driving demand for corrugated paper procurement.

SunSirs paper analysts believe that the current wastepaper market is shifting from oversupply to a tight supply-demand balance, and there is still upward momentum in the short-term market. After the rise in corrugated paper prices, they are likely to remain in a temporary stable and wait-and-see state. The market is digesting the implementation of price increases, and it is expected that in the short term, the prices of wastepaper and corrugated paper will remain stable and slightly strong.

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