Tissue Supply Pressure to Weigh on Prices
Introduction: From January to October 2025, the launch of new tissue capacity slowed down due to intensifying industry competition. The new capacity also showed distinct seasonal characteristics. The concentrated capacity releases during the traditional peak season led to insufficient upward momentum in peak season market prices. From November to December, the tissue market will face multiple pressures, including loose supply, softening demand, and weakening cost support. Tissue prices may face downward pressure, with an estimated decline of around 100 RMB/mt.
Constant tissue capacity release in Jan-Oct 2025 with seasonal characteristics
During the first 10 months of 2025, the newly added tissue capacity in China totaled 1,125kt/a, down 19.06% YoY. The pace of new capacity release slowed down mainly due to intensified competition. The timing of new capacity commissioning throughout the year showed clear seasonal characteristics, with new capacity being launched mostly in January, May, and October.
Tissue mills can fully utilize the peak season demand and effectively expand market share by launching new capacity ahead of the traditional peak season. The restocking before the Spring Festival holiday grants decent downstream demand, and the market trading also warms up in May and October before e-commerce shopping fests like “6.18” and “Double 11”. However, in recent years, the conventional peak season demand has shown diminishing support to the tissue market, especially given extensive new capacity launches during these periods.
Concentrated capacity release led to insufficient upward momentum
In 2025, newly added tissue capacity was concentrated in January, May, and October. According to historical monthly price fluctuation patterns, the seasonal indexes for the average market price during these three months typically showed upward trends, with average increases of 0.84% in January, 1.31% in March, and 1.50% in October. However, influenced by the release of new capacity combined with raw material price fluctuations, tissue price performance in 2025 exhibited some deviations.
Specifically, the average tissue price in January was RMB 6,051/mt, up 0.26% MoM. New capacity releases led to a more ample market supply. While costs increased by 4.54%, the paper price achieved only a 0.26% increase, falling short of the historical average growth rate. In May, the average tissue price was RMB 5,729/mt, decreasing by 3.78% MoM, which contradicts the seasonal pattern. In October, the average tissue price was RMB 5,666/mt. With new capacity releases offsetting positive demand factor, while costs remaining stable, the average price increase was only 0.32%, also below the historical average growth level.
Due to the impact of new capacity release and raw material price fluctuations, the tissue price suffered downward pressure even during traditional peak seasons with insufficient upward momentum.
Supply pressure to persist with new capacity planned in Nov-Dec
From the supply perspective, the tissue market is expected to maintain a loose pattern in November and December with around 200kt/a of new capacity planned. The anticipated new capacity is primarily located in Hebei, Jiangxi, Guangxi, etc. In terms of timing, from late October to mid-November, demand may see some support from restocking activities before the “Double 11” shopping fest. However, after the shopping fest period, combined with seasonal consumption trends, the average consumption decline in December is projected at around 4%. Supply-demand pressures are expected to increase, potentially creating downward pressure on paper prices.
On the cost side, raw material supply shows a loose trend. From late October to December, new pulp capacity continues to be commissioned, combined with the gradual ramp-up of previously added capacity and stable arrivals of imported market pulp, resulting in relatively ample market supply overall. Meanwhile, influenced by the bearish market expectations, raw material prices may show a downward trend, thereby negatively impacting tissue production costs.
In summary, the tissue market will face multiple pressures in November and December, including ample supply, softening demand, and weakening cost support. Under these conditions, tissue prices are expected to face downward pressure, with an estimated decline of around 100 RMB/mt.
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