China Duplex Board Market to Edge Up in Q4
Intro: In Q3 of 2022, the duplex board market stepped down contrary to that in 2021. More duplex board mills had shut down for maintenance, and the overall industry operating rate fell below 50%. But inventory pressure was still prominent due to sloppy consumption. As the supply-demand gap remained, the market lacked upward momentum.
In Q3 of 2022, the duplex board market stepped down contrary to that in 2021. SCI data suggests that the average market price of the duplex board in Q3 is RMB 4,848.75/mt, down 10.51% Q-O-Q and 15.23% Y-O-Y. Therein, the highest point appeared in July at RMB 4,300/mt, while the lowest point appeared in September at RMB 3,987.5/mt.
The overall operating rate dropped apparently in Q3. Large-sized paper mills had posted maintenance schedules since late July and continuously extended the duration. According to SCI, in Q3, the duplex board output dropped by 20.36% Q-O-Q and 22.08% Y-O-Y. The operating rate dropped by 12.06% Q-O-Q and 21.27% Y-O-Y. Besides, some duplex board lines were converted to ivory board production, leading to lower spot availability in the market.
The inventory at paper mills was still high, and the supply pressure persisted. Based on SCI’s survey results with representative players in China, the producer inventory rose substantially in Q3. As of late September, the duplex board inventory day was around 25, up 78.51% Y-O-Y. In order to tackle the inventory pressure, paper mills repeatedly extended their maintenance schedules and offered extra discounts for their excess inventory. The producer inventory edged down from July to September, but because the end consumption failed to pick up effectively, and distributors and printers were less active in purchasing, the destocking pressure persisted at paper mills. Therefore, although the duplex board spot availability decreased, the supply-demand gap remained due to the high inventory.
In Q3, the feedstock waste paper market also slopped, leading to weaker cost support. According to SCI, the total feedstock cost dropped by 7.80% Q-O-Q and 5.30% Y-O-Y. Paper mills actively attempted to destock and lowered production, which hindered waste paper consumption. Besides, due to higher energy costs, paper mills attempted to balance cost pressure by pressing down waste paper prices.
Duplex board market to edge up in Q4.
Large-sized paper mills plan to raise the price by RMB 50/mt on October 10 to stimulate purchases. Meanwhile, the Dongguan mill has announced a maintenance schedule for October, but the supply pressure persists. Although the demand has not picked up noticeably, paper mills are determined to raise the price. SCI reckons that the duplex board market may edge up in October, and the market price of A-grade 250g duplex board may be RMB 3,980-4,030/mt. As the Spring Festival approaches, distributors may become more active in restocking during November and December, which may support the duplex board price, but the market may edge down in late December before the holiday. SCI estimates that the average duplex board market price will be RMB 4,030-4,130/mt.
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