SunSirs: The Development of the Paper Industry Is Changing in 2025, and the Supply and Demand Will Continue to Optimize in 2026

In 2025, the domestic paper industry will present a complex and ever-changing development trend under the multiple backgrounds of macroeconomic fluctuations, supply-demand structure adjustments, policy orientation changes, and green transformation promotion. As the core raw material of the paper industry, wood pulp, and downstream core packaging paper category corrugated paper, their price trends and supply and demand patterns deeply reflect the operational characteristics of the industry throughout the year.

This report will focus on wood pulp and corrugated paper to review the operation of the paper industry in 2025, analyze the driving forces and limiting factors of industry development, and provide prospects for the industry's development trends in 2026.

1. Review of Core Category Trends in the Paper Industry in 2025

In 2025, the core industrial chain links of the paper industry will show differentiation, and the wood pulp market will be affected by global production capacity, import fluctuations, and downstream demand structure adjustments, resulting in fluctuating prices; The corrugated paper market, on the other hand, is affected by seasonal changes in supply and demand, cost linkage, and policy disturbances, and has emerged from a phased market trend of "first suppression, then rise, and then fall". The two major categories together outline the industry's annual operating trajectory.

Wood pulp market: volatile end, category trend differentiation

According to the monitoring of the commodity market analysis system of SunSirs, the price trend of wood pulp in 2025 is complex and volatile. Under the influence of multiple factors such as supply and demand, cost fluctuations, and policy adjustments, the price trend is repeatedly fluctuating. As of December 31st, the average market price of coniferous wood pulp in Shandong region was 5,633.33 RMB/ton, a decrease of 11.98% for the whole year; The average market price of broad-leaved wood pulp in Shandong region is 4,683.33 RMB/ton, with a year-on-year increase of 1.59%. The prices of the two show a significant differentiation.

In the first half of the year, prices first rose and then fell, with the center of gravity shifting downwards. In January, driven by the rise in external markets and downstream demand for Spring Festival inventory, the prices of coniferous and broad-leaved pulp both increased to varying degrees, and the trading center of the pulp market shifted upward; From February to June, global economic growth expectations weakened, downstream demand recovered slowly after the holiday, domestic port inventories continued to accumulate, and coupled with the trade friction pressure brought about by the escalating tariff war, it caused a significant disturbance to China's imported wood pulp spot market, exacerbating the downward speed of prices. The prices of coniferous pulp and broad-leaved pulp both fell significantly, and the market entered a off-season. There were many periods of overall decline in the first half of the year.

The trend of product categories in the second half of the year is going against the trend, and the price difference is gradually narrowing. The supply of needle pulp in the market continues to be loose, domestic port inventory remains high and digestion is slow, terminal order follow-up is weak, downstream factory procurement is mainly for essential needs, and prices continue to fluctuate at a low level; The broad-leaved pulp has been affected by news of production cuts, restrictions, and conversions from some overseas pulp mills, leading to a tightening of the market supply. Coupled with cost support from consecutive price increases in foreign markets, prices have shifted from low to high. After entering November, with the expected increase in external costs and the recovery of futures market sentiment, the spot prices of coniferous and broad-leaved pulp have both started to fluctuate and rise.

Corrugated paper market: first suppressed, then rebounded, and then fell back, with a mild rebound throughout the year

According to the monitoring of the commodity market analysis system of SunSirs, the corrugated paper market in 2025 will be affected by multiple factors such as supply and demand, macro environment, and cost, and the price will show a three-stage trend of "first suppression, then rise, and then fall", achieving a moderate recovery throughout the year. On December 31, 2025, the average ex factory price of 140g corrugated paper was 2,950 RMB/ton, with an annual average price increase of 1.1%.

Specifically, at the beginning of the year, the newly added production capacity in the corrugated paper market continued to be released, and the spot supply was relatively loose; After the Spring Festival, domestic paper mills resumed normal operations one after another, and industry supply remained high. Coupled with the negative impact of the US equivalent tariff policy on domestic manufacturing exports, supply pressure was further highlighted; The downstream packaging paper market has entered a seasonal off-season, with insufficient terminal order quantities, resulting in continuous accumulation of spot inventory and intensifying market supply and demand contradictions, directly driving the price of corrugated paper to rapidly decline until it fell to a historical low level in early July.

After entering the third quarter, the market landscape experienced a reversal. The supply of raw material waste paper is tight and prices continue to rise, coupled with the introduction of domestic "anti involution" policies. Leading enterprises have taken the lead in raising prices and driven small and medium-sized enterprises in the industry to follow suit; The demand side is making efforts during the peak season, with e-commerce activities and express logistics starting ahead of schedule. The packaging demand in industries such as food and beverage, and home appliances is recovering, and downstream purchasing willingness is increasing. The price of corrugated paper is opening up a fast upward channel, forming a core upward cycle for the whole year. But towards the end of the year, the corrugated paper market experienced another sudden change, with prices rapidly declining after briefly maintaining high levels. The core contradiction shifted back to supply-demand imbalance, and the cost side support role significantly weakened. Under the dual pressure, the price correction was significant.

2. Development prospects of the paper industry in 2026

Looking ahead to 2026, the Chinese economy will maintain a positive development trend of steady progress and continuous improvement in structure. With the guidance of policies, optimization of supply and demand structure, and deepening of green transformation, the paper industry is expected to achieve high-quality development. From the perspective of core categories, the wood pulp market will present a pattern of "slow supply growth and moderate demand recovery", while the corrugated paper market will see a substantial improvement in the supply and demand pattern, and the overall industry prosperity is expected to gradually improve.

Supply side: Slowing overall growth and significant structural differentiation

In 2026, the supply side of core categories in the paper industry will show a slowing growth trend, while the structural differentiation characteristics are significant. Changes in overseas production capacity, domestic production capacity adjustments, and import patterns have become the core factors affecting supply.

Wood pulp supply: overseas pressure eased, domestic substitution enhanced

The growth rate of overseas production capacity is slowing down: The average annual growth rate of global pulp production capacity in 2025 is about 1.8%, mainly consisting of broad-leaved pulp and chemical pulp, with relatively little increase in coniferous pulp. In 2026, the pace of global pulp production capacity expansion will further slow down, and large-scale overseas capacity expansion projects are scarce. The structure will still be dominated by broad-leaved pulp, and it is expected that the pace of annual expansion will be low in the beginning and high in the end.

Impact of Capacity Reduction and Shutdown: Due to factors such as low pulp prices and high costs, some high cost areas have experienced a reduction, conversion, or shutdown of wood pulp production capacity. Some pulp mills in Canada, Finland, and other regions in the coniferous pulp industry have extended their downtime for maintenance or permanently shut down their production capacity; Bracell, a Brazilian company in the field of broadleaf pulp, has converted a broadleaf pulp production line with an annual output of 1.5 million tons to a dissolving pulp production line, with an expected reduction of 600,000 tons of broadleaf pulp production by 2026.

The growth rate of import volume has slowed down: In 2025, China's wood pulp imports will show the characteristics of "total volume growth, price pressure, and concentrated sources". From January to November 2025, the cumulative import volume of coniferous pulp will be 7.847 million tons, up 3.3% year-on-year, and the cumulative import volume of broad-leaved pulp will be 15.59 million tons, up 12.2% year-on-year. In 2026, due to the reduction and shutdown of some pulp factories, the shipping pressure of overseas coniferous pulp will be marginally alleviated, and the import volume may be limited; Part of the broadleaf pulp factories have reduced production or shifted production to alleviate supply pressure, and the expected shipping volume is expected to remain stable, reducing their dependence on the Chinese market.

The pressure on domestic pulp supply is prominent: Currently, China's pulp production capacity continues to expand. By 2026, China plans to add more than 2 million tons of chemical pulp production capacity. Although some production capacity may be delayed until 2027, the gradual release of new capacity will promote the continuous growth of domestic pulp supply and form a certain substitution effect on imported pulp.

Corrugated paper supply: production capacity growth slows down, import impact slows down

The speed of capacity addition has slowed down: by 2025, the total domestic corrugated paper production capacity will be about 38.19 million tons, a year-on-year increase of 10.3%, with an increase of about 2.75 million tons of new production capacity. The concentration of top enterprises has increased, and the proportion of production capacity in East and South China exceeds 75%. The utilization rate of leading production capacity will remain above 90%.

In 2026, the speed of new production capacity of corrugated paper in China will significantly slow down, with a total of about 1.57 million tons of projects with strong production certainty. In addition, some small and medium-sized production capacity will be cleared. Although the overcapacity pattern in the industry will continue, the negative impact of new production is relatively limited.

There is still a slight increase in production: from January to December 2025, the domestic corrugated paper production was about 28.2 million tons, a year-on-year increase of 3.21%, and the capacity utilization rate reached 70% -80%. In 2026, the production will continue to maintain a steady growth trend, but the growth rate will significantly slow down. It is expected that the annual production will reach 29.2-30 million tons, a year-on-year increase of 3.5% -6.0%, and the capacity utilization rate will increase to 72% -75%.

The impact of import volume is slowing down: From January to November 2025, the cumulative import volume of corrugated paper was 2.0204 million tons, a year-on-year decrease of 17.87%, continuing the downward trend of 2024. In 2026, the production capacity investment in overseas Southeast Asian markets will come to an end, stabilizing China's export supply capacity. In addition, the low price of US waste will weaken the cost advantage of Southeast Asian enterprises, and the competitiveness of imported paper prices will decrease. Coupled with the historical low range of domestic paper prices, the profit margin of imported paper is limited, and the import willingness of enterprises is insufficient. It is expected that the import volume of corrugated paper will continue to shrink, further easing the impact on the domestic market.

Demand side: Moderate recovery as the main focus, structural optimization and upgrading

In 2026, the demand side of the paper industry will continue to show a moderate recovery trend, with growth mainly driven by the structural upgrading of downstream sub sectors and the release of emerging demand. At the same time, due to factors such as weak demand in some traditional sectors and the impact of alternative materials, the growth rate is difficult to significantly increase, and the overall trend is characterized by "stable total volume and optimized structure".

Wood pulp demand: segmented field differentiation, led by high-end demand

The main driving force for the growth of domestic wood pulp demand in 2026 is the continuation of the high prosperity of specialty paper, the deepening of the substitution effect of high-end packaging paper, and the promotion of the upgrading of household paper quality. At the same time, the growth rate is relatively moderate due to factors such as weak demand for cultural paper and the substitution of recycled pulp.

In the field of household paper: With the continuous increase in demand for hygiene products, kitchen paper, etc., the consumption of broad-leaved pulp has significantly increased, becoming the core contributing sector to the increase in wood pulp demand. It is expected that the growth rate of pulp demand in this field will be 5% -8% by 2026, which will continue to drive the growth of wood pulp demand.

In the field of cultural paper, the overall demand growth is weak due to the impact of electronic reading. However, double adhesive paper has achieved bottom stabilization with rigid demand such as textbooks and teaching aids. Copperplate paper relies on export marginal improvement to alleviate domestic pressure, providing stable support for the demand for needle pulp. It is expected that the pulp demand in this field will slightly increase or remain stable by 2026, and some production capacity may shift to other paper types.

In the high-end packaging paper field, driven by the deepening implementation of the "plastic ban" and the rapid development of e-commerce and logistics industries, demand continues to be strong. Among them, the demand for high-purity broad-leaved pulp in the food packaging field has grown significantly, and e-commerce packaging has driven the demand for the combination of some chemical pulp and broad-leaved pulp. It is expected that the pulp demand growth rate in this field will be 4% -6% by 2026.

In the field of specialty paper, high-end tracks such as medical paper, lithium battery separator substrates, and decorative base paper continue to thrive, leading the industry in growth rate and demanding high quality wood pulp. This not only drives the consumption of coniferous pulp, but also generates customized demand for specialty broad-leaved pulp and high-yield pulp, becoming an important force in promoting the upgrading of wood pulp demand structure.

Corrugated paper demand: Strong core engine, constraints still exist

In 2026, the demand for corrugated paper is expected to continue its overall stable and moderate recovery trend. The core growth drivers will come from e-commerce logistics, emerging food and beverage industries, and green packaging substitution. At the same time, the growth pace will be constrained by factors such as weak real estate demand and the trend towards reduced packaging.

In terms of consumption: From 2019 to 2024, the annual consumption of corrugated paper increased from 23.74 million tons to 34.07 million tons. The total consumption from January to October 2025 is about 21.84 million tons, a year-on-year increase of 5%, and the growth trend continues.

In 2026, the e-commerce logistics industry will still be the core growth engine, and it is expected that the volume of China's express delivery business will exceed 150 billion pieces, of which over 90% of the packaging will use corrugated cardboard boxes, driving the demand for corrugated paper to exceed 9 million tons, a year-on-year increase of about 12%; In the food and beverage industry, emerging formats such as fresh e-commerce and pre packaged meals have exploded, driving the demand for corrugated paper for cold chain logistics to grow by 12.5%, effectively offsetting the slowdown in demand for traditional food packaging; The upgraded version of the "plastic ban" continues to be promoted, and the demand for plastic packaging replacement in industries such as food and beverage, medicine, etc. is released, further driving the consumption of corrugated paper. It should be noted that the demand for packaging related to real estate is still weak, and the growth rate of corrugated paper demand in industries such as home appliances and furniture remains low. The trend of packaging reduction has resulted in an average annual decrease of 2% in the amount of paper used per unit product, which has a certain degree of suppression on the growth of consumption.

The export volume is expected to increase: from January to November 2025, the cumulative export volume of corrugated paper will be 100,400 tons, mainly to Southeast Asia and countries along the "the Belt and Road". In 2026, with the global manufacturing industry recovering, packaging demand in Southeast Asia, the Middle East and other regions continues to increase. Coupled with the gradual improvement of overseas layout of domestic leading enterprises, the export volume of corrugated paper is expected to increase, becoming an important supplement to digest domestic production capacity and further balance the domestic supply and demand pattern.

3. Core Trends in Industry Development: Deepening Green Transformation and Upgrading Ecological Synergy

The green and low-carbon transformation of the paper industry will continue to deepen in 2026, becoming the core mainline for high-quality development of the industry. The ESG information disclosure rate of A-share listed paper companies has increased from 21% ten years ago to over 79%, with carbon emissions becoming the core focus of information disclosure. Leading companies such as Cairn Group and Shanying International have shown initial results in their carbon reduction actions.

At the policy level, the 'Work Plan for Stable Growth of Light Industry (2025-2026)' provides support for the green transformation of the industry. Simultaneously building a collaborative green ecosystem between upstream and downstream is the key to solving the problem of "increasing production without increasing profits". The upgrading of downstream demand forces technological innovation, and the main enterprises in the industrial chain will lead the entire chain to achieve green, intelligent, and high-end upgrades.

4. Summary and Suggestions

Overall, in 2025, the core categories of wood pulp and corrugated paper in the papermaking industry will exhibit periodic fluctuations, reflecting the supply-demand imbalance and cost pressure faced by the industry during the transition period. In 2026, the industry will experience a continuous optimization of the supply and demand pattern, and the wood pulp market will show a trend of "slow supply growth and moderate demand recovery". The medium and long-term supply and demand pattern is expected to continue to optimize, and the prosperity will gradually improve; The corrugated paper market, driven by a slowdown in production growth, weakened import shocks, and a moderate recovery in demand, has achieved a shift in prices from low volatility to rational recovery. The price center is expected to rise moderately compared to 2025. At the same time, the deepening of green and low-carbon transformation and the coordinated upgrading of the industrial chain will become the core trend of industry development, promoting the industry to move towards a stage of high-quality development.

For industry enterprises, it is recommended to grasp the following development directions: firstly, accurately grasp the peak season demand window period, combine the changes in the supply and demand rhythm of wood pulp and corrugated paper, optimize production and inventory management, and reasonably avoid price fluctuation risks; The second is to focus on upgrading the product structure, increase research and development investment in high value-added products such as high-end specialty paper and functional packaging paper, and align with the trend of downstream demand structure optimization; Thirdly, we will deepen the green and low-carbon transformation, actively promote energy-saving and consumption reducing technologies and the application of biomass energy, enhance ESG management level, and seize the development opportunities brought by policy guidance; The fourth is to strengthen the synergy of the industrial chain, especially leading enterprises should play the role of chain leaders, promote upstream and downstream collaborative innovation, build a sustainable industrial ecosystem, and jointly address the challenges of industry transformation.

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