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Gulf Cooperation Council (GCC) region prices for recycled fiber-based containerboard (RCCM) were stable to down, according to pricing data received for Fastmarkets’ PIX indices published on Wednesday January 7. The indices for locally produced brown testliner and fluting both dropped in December.
Fastmarkets calculated its monthly PIX Testliner GCC index at $463.55 per tonne on January 7, down by $3.80 per tonne (0.81%) from $467.35 on December 2.
Fastmarkets calculated its PIX Fluting GCC index at $440.58 per tonne on January 7, down by $4.23 per tonne (0.95%) from $444.81 on December 2.
Containerboard demand was mostly down during December, according to market participants across the GCC region.
In addition to the typical practice of the industry, where many corrugators deliberately start to minimize their inventory levels to end their year with lower stock, another factor limiting demand during December in Saudi Arabia, in the largest market in the region, was reportedly a cash shortage in the market. The orders were placed in December, but due to delays in payment collection and lower cash flow, companies could not support additional deliveries or release further dispatches.
“We expected 2-3% reduction [in demand] due to inventory closing, but because of the cash flow, the reduction was about 5-6% in December,” a GCC-based producer source told Fastmarkets.
But some Saudi Arabian corrugators reported seeing a modest uptick in demand for their products during December compared with November, citing preparation ahead of Ramadan.
“Demand is just slightly better than November, [though] it is not very encouraging,” a corrugator said.
Similarly, in the United Arab Emirates (UAE), demand was reported to be on the lower end, though expected, according to a source.
“December is low, but it was expected because most close their year-end and don’t take much material or stocks,” a UAE-based expert said. “Also, date season is already gone,” he added.
Middle East Paper Company (MEPCO) has decided to terminate its planned acquisition of Al Medan Project Company for Corrugated Carton (MPCCC), citing unmet required conditions, the company announced on December 28.
Under the terms of the agreement, MEPCO had nine months from March 27 to terminate the purchase by written notice if the conditions were not met. The deadline ran out on December 27.
The companies did not reply to Fastmarkets’ request for comment.
Market participants reported mixed views on recovered paper (RCP) prices, with some reporting prices as stable to up in Saudi Arabia during December.
According to market participants, one factor behind the recent increases in prices is tighter RCP availability due to additional RCCM capacity coming online in Saudi Arabia. Al Jawdah, which previously sold RCP to other RCCM producers, has now been using its RCP for its own production. In addition, Red Sea has now expanded its presence on the market, having started trial production on its PM2 on December 20, according to the company’s announcement on WeChat.
Red Sea’s new three-wire PM2 has the capacity to produce around 178,000 tonnes per year, with a trim width of 5.23 meters and a speed of 500 meters per minute, according to a source close to the project. PM2 is designed to produce white-top testliner and gypsum board, the source said. It can also produce testliner and corrugating medium with a basis weight in the range of 75-150 g/m², according to a corrugator in the region.
Red Sea has not responded to requests for comment from Fastmarkets.
“It [Al Jawdah using RCP for its own production] is impacting the availability of RCP in the market plus Red Sea is trying to build a stock, taking more quantity from the market so that puts [additional] pressure on the availability,” a Saudi Arabia-based contact said. “That’s why we see [RCP] prices increasing,” he added.
Meanwhile, in the UAE, RCP prices are more or less stable or slightly up. One UAE-based corrugator noted that if RCP prices were to rise sharply, containerboard mills would immediately push for price increases, citing higher raw material costs. But since RCP has remained steady, mills are not raising any concerns.
“Nobody is talking now, they are just keeping the same prices,” the corrugator added.
Conversely, one market participant reported a small uptick in prices, possibly due to some increased demand from India.
European containerboard producers were less active in the UAE and Saudi Arabia in December, though they still remained present in both markets. Despite their reduced presence, European mills continued to be the main competitors alongside regional GCC-based containerboard producers during December, according to most contacts.
Some market experts speculated that the reduced activity was due to end-of-year holidays in Europe.
One GCC-based producer, however, blamed European mills for removing their chance to increase prices ahead of the Ramadan season.
“Europe is the main culprit in disturbing the overall sentiment and the prices [in the GCC region]. I did not hear many offers [from Europe], but the damage was already done,” the containerboard supplier said.
In the UAE, Indian containerboard mills continue to have their usual presence, though not a significant one, because their prices almost match the local ones.
“I am getting enough paper locally,” a UAE-based corrugator said.
Land-based shipment costs have remained stable throughout the year, with transport quotations only reflecting the increased diesel prices announced by the Saudi government at the beginning of the year of 2025.
But there will be changes in the shipment costs in 2026, since the Saudi government has increased diesel prices in the country by 7.8% to 1.79 Saudi Arabian riyal ($0.48) per liter starting from January 1, 2026.
This is particularly important for GCC containerboard trade, because most of the RCCM is transported by road within the region.
“Our transportation costs will go up, so we will try to pass the increase to our customers, and I know they will try to fight it hard. We will have to see,” a Saudi-based corrugator said.
In terms of international freight rates, Drewry’s World Container Index (WCI) has risen by approximately by 13% from November 6, increasing from $1,959 per 40-foot container then to $2,213 on December 25.
Looking ahead, GCC-based producers and corrugators expect demand for packaging materials to rise in January while preparation for Ramadan begins.
“Demand should be better in January. It is the main month for Ramadan [preparations],” a GCC-based producer told Fastmarkets.
In Saudi Arabia, multiple contacts both on the buyer and seller sides expect that containerboard producers may attempt to raise prices during the first quarter on the back of increased diesel prices, but it remains to be seen.
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