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In September’s Asian Pulp and Paper Monitor, our economists looked at the trends behind major market movements in the region. Here we share a snippet of their analysis. The full report includes insights on the pulp, paper packaging and containerboard markets. If you’d like to access the underlying data, or talk to our team of experts about their predictions for the remainder of 2024, contact us.
From a demand perspective, paper and board markets in China remained relatively subdued in July and August, reflecting the sluggishness of the Chinese economy. The Chinese consumer market continued to be relatively soft as confidence remained poor and government policies focused more on the supply side of the economy.
Most PMIs remained weak in August, many holding below 50. Year-over-year growth in goods exports was solid in July, but some of the strength in year-over year comparisons reflected the low export levels in 2023.
We expect that the troubled property market, a lack of income growth and low consumer confidence will hold back Chinese economic growth over the next several months. Exports and manufacturing have been the primary source of economic growth recently and are likely to remain so in the coming months.
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Third-quarter newsprint prices in India posted minor increases from the second quarter, up an average of $5 per tonne for both 42-gsm and 45-gsm grades (PPI Asia, September 6, 2024).
Canadian and Russian suppliers were the most active in the market, and their prices fell more in the middle to low end of the range. Canadian shipments were subject to delays and higher freight costs, while Russian suppliers were not because the sanctions force them to use different shippers that were not impacted by the flurry of activity in China that drove the jump in freight rates.
Asian suppliers had very few sales; their prices were at the high end of the range, and soaring freight rates limited the interest in transactions for both buyers and sellers.
To read the forecast for newsprint prices, you can access a free sample of the report here.
In China, woodfree paper markets were sluggish, and prices fell in July and August due to oversupply and declining pulp prices. The coated woodfree paper market was mostly steady in July with unchanged prices.
Some major producers, such as Shandong Chenming Paper, Hainan Jinhai Paper and UPM Paper, took 4-10 days of downtime in July, removing around 40,000 tonnes of capacity, which moderated the oversupply issue and allowed prices to remain stable even as demand was still weak and costs were reduced.
Then, in the middle of July, major suppliers announced a price increase of RMB 100 per tonne to begin August 1. But this increase failed, and prices in August ultimately declined RMB 50-100 per tonne. August is the traditional slow season, and there were few orders for coated woodfree paper from downstream buyers. Additionally, producers did not take downtime, which worsened the oversupply.
Declining pulp prices also affected market confidence in paper prices. Uncoated woodfree paper markets were more competitive, and prices edged down much more in July and August, especially for mid- and low-end products.
Chinese recycled containerboard prices decreased several times across China except East China in July for a total loss of RMB 20-150 per tonne. In East China, prices were largely stable as they had not moved up in the previous months like they had in other regions.
At the beginning of August, mills initiated hikes to deal with falling profits, but customer acceptance was not high, and prices started to weaken in mid-August and even fell in some regions due to weak demand and ample supply.
Seasonal factors as well as concerns over the state of economy dampened purchases. At the same time, there was plenty of supply because of rising availability from new capacity. This led producers to offer price discounts to win sales. In August, prices were relatively chaotic, rising and falling, but ultimately the national average price showed a slight drop.
The price declines were mainly concentrated in South China, with little change in East China and a slight increase in North China; the steadiness in East China likely resulted because prices there had dropped more than in other regions in April and May.
Interested in accessing the full monitor, including forecasts for each commodity? You can get a free sample of the Fastmarkets Asian pulp and paper monitor report here or by filling in the form above. Fastmarkets provide a range of market intelligence, including short-term forecasts, price data and market coverage to keep you one step ahead of the market. Speak to our team and find out more today.