Nine Dragons schedules more recycled containerboard downtime at three mills in China
Slow demand and weak board prices are driving the downtime at Chinese board mills
Nine Dragons Paper (Holdings) has set forth more downtime plans for three mills in China, which is estimated to trim its recycled containerboard production by a total of 79,000 tonnes by early May.
The company suspended a 550,000 tonne per year (tpy) recycled containerboard machine, dubbed PM 40, at its mill in Chongqing municipality in the southwestern part of the country on April 7 and it is set to remain offline for 30 days. The prolonged stoppage is expected to cut the output of testliner and corrugating medium by approximately 49,000 tonnes.
The company is also slowing production at its 1 million tpy recycled containerboard mill in Tangshan city, in the northern province of Hebei.
The 350,000 tpy Y6 machine there is going through a 10-day outage, which started on April 10 and will cut the mill’s kraft-top liner output by around 10,000 tonnes.
In the nearby Tianjin municipality, the company boasts five packaging board production lines with a combined capacity of 2.15 million tpy.
The 450,000 tpy recycled linerboard unit PM 25 there is scheduled to suspend operations for 15 days from April 14, which will reduce its kraft-top liner output by nearly 20,000 tonnes.
The slowdown is part of a wider Chinese mill curtailment
These halts have come on top of Nine Dragons’ extensive production curtailment arrangements, which started mid-February and have affected the three facilities above as well as its board mills in Guangdong, Fujian and Jiangsu provinces.
If all the scheduled shutdowns, which Nine Dragons ascribed to maintenance purposes, are carried through, the company will trim nearly 719,000 tonnes of board supply between mid-February and mid-May.
Other recycled packaging board producers in China have also been curbing production on various scales since early February.
Sluggish packaging demand and weak board prices are the key drivers behind the widespread downtime at Chinese board mills.
The large-scale supply cuts appear to have balanced the market and eased the downward pressure on board prices. Some producers have started pushing for hikes, typically of Renminbi (RMB) 50 ($7.30) per tonne, for their recycled containerboard grades since last week. It remains to be seen by how much transaction prices will rise.
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