MethodologyContact usSupportLogin
There were slight increases in prices for locally produced testliner and fluting in the Gulf Cooperation Council (GCC) countries in June. Producers kept upward pressure on prices, referring to high costs of old corrugated containers (OCC) and logistics.
Want to know what’s driving recent price hikes and impacting your market? Talk to us about our short-term and long-term forecast options for the containerboard industry to stay ahead of developments in your market. Talk to us today!
The prices reported to us this time typically increased by no more than $10 per tonne and several contacts said their prices had not changed. As a result, PIX Testliner GCC climbed by 3.18 dollars, or by 0.69%, up to 465.19 USD/t. PIX Fluting GCC headed higher by 3.83 dollars, or by 0.87%, and closed at 442.02 USD/t.
The latter part of June saw many corrugators take a few days of downtime during the Eid al-Adha holiday, but containerboard mills generally did not report any stoppages. Comments regarding demand were again mixed, in part depending on the country in question.
In Saudi Arabia, most sources reported healthy consumption, though some noted a bit of a slowdown around the holiday in June. Looking ahead, they expected demand levels to be boosted in July-September by higher beverage consumption, linked to the hot weather and the date harvesting season.
In the United Arab Emirates (UAE), several market observers witnessed a deceleration in June, and they expected this to be visible in July and part of August as well.
“Expats go to their home countries with their kids for school holidays during summer and the local population goes to Europe,” one source in the UAE summarized.
Containerboard producers noted that prices for OCC remain at a high level in the region and one also complained about availability, saying they were struggling to source sufficient volumes locally.
The UAE introduced an export fee on certain recovered paper grades earlier this year. It first led to a dip in OCC prices, but these quickly rebounded, and many market participants said the fee did not have the effect local containerboard mills had been hoping for.
Logistic costs within and between GCC countries remain elevated, according to several contacts. Overseas shipping rates have also been rising, particularly for west-bound material, containerboard producers in particular remarked. Drewry’s World Container Index has soared by 97% over two months to $5,318 per 40ft container at the end of June.
Contacts offered quite varied comments regarding containerboard imports from Europe and India, but a number of sources mentioned that Chinese containerboard has been offered in the GCC region of late.
Regional capacity has recently received a boost. A Chinese-owned company usually referred to by the name Red Sea has reportedly started producing testliner and fluting at a new mill in Yanbu on the Saudi Arabian west coast.
A few sources confirmed seeing and multiple others hearing of test volumes sent to corrugators in Saudi Arabia. The contacts estimated the mill’s production capacity to be 6,000-7,000 tonnes per month. Fastmarkets has not been able to confirm the startup or the details with the firm.
Looking ahead, buyers and sellers are discussing new prices for July or the third quarter. Multiple contacts said producers were trying for another price hike, the result of which remains to be seen.
PIX indices covering the two main recycled fiber-based containerboard grades, produced in and delivered to the GCC, were launched in June 2023. The GCC countries include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
Interested in learning more about paper packaging market developments and trends in the industry? Speak to our team today and find out how we can help you stay ahead of the competition.
Learn how to monitor packaging prices using cost and price indices and understand the underlying cost drivers, from material cost to labor, energy and more. Examples include cartonboard, liquid container and paper bag.