According to the SunSirs commodity market analysis system, corrugated paper prices maintained a firm trend this week, characterized by cost support, tightening supply, and divergent demand. As of July 16, the average ex-factory price for 140g corrugated base paper was 3,210 RMB/ton, a 0.75% increase compared to the average price on July 12.
Cost Side: Waste paper prices in Zhejiang remained stable this week, while prices at paper mills nationwide saw slight increases. As of July 16, the average purchase price for Grade A waste yellow cardboard in Zhejiang was 1,978 RMB/ton, remaining steady compared to July 12. Widespread, persistent rainfall and localized typhoons across the country hindered outdoor waste paper collection, drying, and transportation; consequently, baling stations faced a shortage of dry stock, leading to a reluctance to sell and a tendency to hoard inventory. The circulation of high-quality dry yellow cardboard plummeted, and paper mills in some regions continued to raise purchase prices to secure supplies.
Supply Side: Only a few paper mills that had halted operations for maintenance resumed production this week, resulting in insufficient growth in overall effective industry output. This, combined with leading paper enterprises proactively controlling production and scheduling output based on demand, caused the market circulation of finished products to tighten further. With paper mill inventories continuing to decline, there was no pressure to clear stock at low prices, and mills showed a strong determination to maintain price levels. Following two years of losses and industry consolidation, outdated small and medium-sized capacities have been phased out, leaving industry leaders like Nine Dragons, Shanying, and Lee & Man controlling over half of the production capacity. On July 13, multiple major manufacturers issued simultaneous price hike notices for corrugated paper; pricing across national production regions became highly unified, creating a concerted effort to rigidly support prices on the supply side.
Demand Side: The market remains in the traditional off-season for packaging, with lackluster growth in demand from the food, home appliance, and domestic express delivery sectors. Small and medium-sized carton factories, facing squeezed profit margins due to continuous price hikes, are resisting high-priced base paper; they are purchasing strictly according to need and show little willingness to place bulk orders, thereby limiting the potential for significant price surges in corrugated paper. Driven by the early, concentrated release of orders for Christmas-themed packaging, operating rates at export-oriented carton factories in coastal regions remain high. As export orders offer higher profit margins, paper manufacturers prioritize production capacity for the export market; this diverts the supply of base paper away from the domestic market, thereby offsetting weak demand during the domestic off-season and stabilizing the market's trading volume.
Analysts at SunSirs believe that current waste paper prices are prone to rising rather than falling, providing continuous cost support for corrugated paper. However, with corrugated paper prices hovering at yearly highs, downstream small and medium-sized carton factories face severe cost pressures and show little willingness to purchase at such elevated levels. If prices were to spike sharply in the short term, downstream buyers would likely cut back on procurement across the board and adopt a wait-and-see approach, effectively forcing paper manufacturers to slow the pace of price hikes. Consequently, corrugated paper prices are not expected to undergo a downward trend in the near term; instead, the market is likely to maintain a pattern where prices are more inclined to rise than fall.
SunSirs has been continuously tracking price data for over 200 commodities for nearly 20 years, please contact support@sunsirs.com for subscription.
