Demand for US old corrugated containers (OCC) ticked up in January as recycled pulp mills in Southeast Asia seek more fiber at the start of the year, yet pricing for recycled brown pulp (RBP) remained unchanged at $340/tonne net CIF to China for the third consecutive month, according to Fastmarkets’ PPI Pulp & Paper Week January 18 pricing survey and market report. Contacts reported that market demand met supplies.
Some sellers reported RBP trades in January at higher prices, up slightly to $350- 360/tonne net CIF to China. However, the majority told of firm prices that held at $340/tonne net CIF to China.
After six straight months of pricing declines through October 2022, RBP pricing has remained at $340/tonne net CIF to China since November. In one year, pricing has decreased 27%, or $125/tonne net CIF to China vs $465/tonne net CIF to China in January 2022.
Buyers and sellers of RBP told P&PW that business is “better” in Southeast Asian countries, and the anticipation of China’s return after many months of lockdowns due to the pandemic that has kept workers and residents at home. As restrictions are lifted, the economy is expected to pick up again.
“RBP is up slightly to $350-360,” a seller said. “Chinese mills are getting ready for (a) potential packaging uptick as Covid restrictions get lifted. Many expect (the) economy to gradually get back to normal starting Q2.”
However, contacts said the paper market in China is still “plagued” with overcapacity, weak export demand, and lacking domestic recovered fiber collection.
China lowers import duties. “China mills depend heavily on exports and that area has been weak,” a contact said. “China recently lowered the import duties, and that adds more pressure on domestic mills.”
On January 1, China lowered import taxes on 1,020 commodities, including 67 kinds of paper and paper converting products. Among them are corrugating medium, recycled linerboard, virgin and recycled boxboard, and both coated and uncoated freesheet paper. China has decided to waive the standard most-favored-nation (MFN) tariffs of 5-6% on imports of these grades until the end of this year.
China’s Ministry of Finance said that the tariff cuts would increase supply, and help its industrial chains and supply chains in China.
Another large seller said business in China remains stale, as well as slowdowns due to the Chinese Lunar New Year. The seller said RBP price is $310/tonne net CIF to China ports.
“(The) China market is slow and quiet overall,” another seller said this week. “Many manufacturers are shut down recently due to surge of COVID cases. Also, one week before Chinese New Year, it’s traditionally a slow month.”
Total exports of recycled pulp were up vs one year ago, according to the most recent data from the American Forest & Paper Association (AF&PA). The 454,000 tons of recycled pulp exported through November 2022 was up 19.8% vs the first 11 months of 2021.
This article was first published in PPI Pulp & Paper Week, the industry’s most trusted pulp and paper market news and prices for North America. Speak to our team to find out more and subscribe to our newsletters.
