Corrugated and Cardboard Paper Market Developed Steadily in 2021
with Higher Avg. Prices
In 2021, the corrugated paper and cardboard paper market in China is mainly on the rise supported by the ban on waste paper imports, global-wide inflation, the carbon emission peak and carbon-neutral policy changes as well as the increase in energy and raw material costs.
Corrugated paper and cardboard paper market overview
In 2021, the corrugated paper and cardboard paper market is in the stage of stable development. With the release of newly added capacity, the industry concentration ratio of the industry has been climbing. As seen from the supply-demand pattern, the corrugated paper and cardboard paper market is slightly oversupplied, and the supply pressure in the cardboard paper market is more prominent. As new cardboard paper capacity is scheduled for commissioning in 2022 and 2023, the supply pressure may continue to rise.
The capacity of corrugated paper and cardboard paper is relatively scattered in China, and most players can produce both corrugated and cardboard paper. The largest player in China has a capacity of nearly 20million mt/a with production bases located mainly in coastal regions such as South China, East China and North China. However, due to policy changes that affected feedstock supply patterns, newly added packaging paper capacity is mostly located in Central China and Southwest China provinces such as Hubei, Guangxi and Guizhou.
Corrugated paper and cardboard paper price trend analysis.
In 2021, the corrugated paper market fluctuated upwards. SCI data indicates that the annual average price of AA grade corrugated paper in China is RMB 3,882/mt as of Nov 24, up 18.47% Y-O-Y. Therein, the highest price appeared in October at RMB 4,494/mt, while the lowest price appeared in early 2021 at RMB 3,474/mt. The spread between the highest and the lowest prices is RMB 1,020/mt or 29.36%.
Factors affecting the corrugated paper market are as follows. First, the supply of raw materials is relatively tight, leading to higher production costs. Second, price adjustments of large-sized players offer clear guidance to the market trend. Third, due to the lingering effect of the COVID pandemic, the shipping freight remains high, leading to a narrowing arbitrage window for imports. Last, policy factors such as the coal-to-gas reform, carbon emission peak and carbon neutrality during the 14th Five-Year Plan also affect the packaging paper market.
In 2021, the cardboard paper market fluctuated upwards. According to SCI, as of November 24, the annual average cardboard price was RMB 4,791/mt, up 16.97% Y-O-Y. Therein, the highest price appeared in November at RMB 5,348/mt, while the lowest price appeared in early 2021 at RMB 4,430/mt. The spread between the highest and lowest prices is RMB 918/mt or 20.72%.
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