​Solid White Cardboard Demand Supports Pulp Consumption

Solid White Cardboard Demand Supports Pulp Consumption

The white cardboard industry in China is still in an expansion stage at present, and the supply-demand structure is improving. In is estimated that the white cardboard supply will be over 9,000kt, and the demand will be close to 8,000kt. The white cardboard industry growth rate and concentration degree have both increased this year. The increasing white cardboard output and consumption will support the upstream wood pulp consumption.

In the paper industry chain, white cardboard producers were among the mid-to-upstream producers. The main feedstock used by white cardboard producers is wood pulp, and the price of wood pulp stabilized after decreasing. However, the white cardboard price fluctuated upwards. As a result, although the profit of wood pulp has decreased, the profit of white cardboard was increasing. Besides, the availability of wood pulp remained stable in spite of the capacity expansion in the white cardboard industry because the overall wood pulp supply has increased this year. Meanwhile, the downstream demand for white cardboard also increased steadily, and the industry development was balanced and stable. As a result, the pulp market will benefit from the supply and demand increase in the white cardboard market. 

In the recent 5 years, the white cardboard output was generally on an up-trend expect for the output decreased from 2017 to 2018 due to increased turnarounds. From 2015-2016, the average annual output increase was 200kt. In 2019, the estimated output increase will be close to 1,000kt, and the total output will be around 8,000kt. It is expected that the white cardboard output will reach 9,000kt. 

The white cardboard demand also increased steadily in the past 5 years. Benefited from the improvement in China’s consumption level and the high regards to food safety, the white cardboard consumption continued to increase in 2019. The estimated white cardboard consumption is over 7,000kt. In 2020, the white cardboard consumption in China will continue to increase, reaching 8,000kt. 

The white cardboard price trend varied in the past five years. Except for the price in 2015, which remained relatively stable, the white cardboard price fluctuated violently from 2016 to 2018. In 2017, the price increased constantly, and the price increased by over RMB 1,000/mt cumulatively. In 2018, however, the price decreased due to intensified competition. In this year, the white cardboard price was stable-to-increasing. It is estimated that the average white cardboard price will increase further by 5%.

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