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Several integrated pulp and tissue paper producers in China were able to increase prices for tissue jumbo rolls by 50-100 yuan ($7-14) per tonne in the month to Friday April 3, on rising woodchip expenses and production downtime, according to sources.
Small and medium-sized mills caved in to downstream buyers’ resistance and were forced to withdraw proposed price hikes and even cut prices, which led prices to fluctuate within a narrow range, sources said.
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Tissue suppliers and converters reported strong demand in March, as all converters who had paused operations in February for the Lunar New Year holiday had resumed work. Although the official holiday period was from February 15-23, many companies extended their breaks. Additionally, orders increased due to Women’s Day and students returning to school after the winter vacation, sources said.
Several suppliers proposed raising jumbo roll prices by 100 yuan per tonne starting mid-March. However, only a few integrated tissue manufacturers in South and East China managed to implement price increases successfully, with some applying adjustments only to specific products rather than across all grades.
Chinese tissue jumbo rolls that Fastmarkets covers including two subgrades, one for those sold for converting into facial tissue products, and the other for processing to toilet paper. The one for facial tissue products is priced 100-200 yuan per tonne higher than the one for toilet paper.
A tissue supplier said the price increase for jumbo rolls was necessary for them due to maintenance downtime at their integrated facilities, resulting in reduced sales.
Four integrated pulp and tissue manufacturers scheduled maintenance shuts between March and May, each lasting approximately one to two weeks, sources told Fastmarkets.
Still, declining market pulp prices in late March, combined with buyer resistance, undermined planned price increases. Some producers in North China also reduced their offers in response to falling pulp prices.
“Tissue jumbo roll prices remained stable or decreased in North China but were steady or increased in East and South China due to market variations. Most mills in North China are smaller and more sensitive to pulp price changes because they maintain lower inventories. Conversely, larger mills in East and South China hold more feedstock or produce their own pulp, resulting in slower cost responses to pulp price reductions,” a second tissue supplier said.
Currently, large mills use pulp purchased previously when prices were higher and are reluctant to lower prices for jumbo rolls. Additionally, the rise in woodchip prices in March is expected to elevate in-house pulp production costs going forward, making integrated mills reluctant to withdraw the proposed price hike for jumbo rolls.
According to industry sources, buyers for large tissue suppliers are unlikely to quickly switch to cheaper jumbo rolls from smaller producers as long as margins persist, given the superior quality offered by major producers.
Sources told Fastmarkets that retail prices for tissue products remained stable in March, making buyers reluctant to accept higher jumbo roll prices.
“Our margins were constrained as finished product and retail prices remained largely stable, while jumbo roll prices increased during the first quarter. Additionally, logistics and packaging costs rose in March. Inland logistics expenses rose in certain regions, and ocean freight costs for exports saw a further increase due to ongoing conflicts in the Middle East,” a converter source said.
“Express delivery fees in the retail market have remained unchanged; however, an increase is anticipated in recent weeks. Prices for some packaging materials, including plastics and containerboard, are also experiencing upward movement,” the converter source added.
Retailers resisted higher prices for finished products, anticipating weaker demand after mid-April due to fewer holiday-related purchases in the second quarter, according to the converter source.
A tissue producer told Fastmarkets that rising ocean freight costs weighed on export demand to destinations like Africa and Europe, since freight rates rose more for these areas. Meanwhile, exports to Asia became more concentrated because freight increases were smaller, leading to intense competition in Asian export markets and within the domestic market.
“However, the tissue FOB prices for export also remained stable in March, despite higher logistic cost,” the tissue producer said.
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