Chinese paper and board markets remained weak in April as the trade war took its toll.
Some of the high frequency data provide mixed signals on the state of China’s economy, but we believe that it is struggling somewhat, and the situation is likely to worsen as the trade war lingers. Data released on Friday indicated that Chinese exports to the US were down 21% in US dollar terms last month, but total exports were remarkably strong, up 8% due to a 21% surge in exports to Southeast Asia and an 8% increase to Europe.
Still, April’s index on export orders dropped to 44.7 and the broader PMI fell below 50 to 49, signaling growing concerns for the economy due to the trade war. Anecdotal reports highlight slowing activity at many export-oriented businesses. Retail sales were relatively healthy in March (no data yet for April) and the government reported strong holiday travel and tourist spending over the May Day holiday.
On balance, our view is that the economy will remain restrained over the next several months as high tariffs linger, with negotiations only just beginning and likely to take time. The announcement Monday morning of the reduction in tariffs to 30% for Chinese imports into the US and 10% for US imports into China is a positive sign.
But the tariffs are still large enough to dampen trade, especially if buyers think that at least for many products, the final tariff levels could be lower. The Chinese government will continue to implement stimulus policies, but they also will take time to have much of an effect.
On the paper and board side, the sluggish economy has led to slower-than-normal seasonal demand — on the packaging side, April is traditionally a slow month, but April 2025 was slower than usual.
Printing & writing paper
In April, Chinese woodfree paper prices for both coated and uncoated grades declined due to sluggish demand and plunging pulp prices.
Coated woodfree paper demand was weak in April with insufficient orders from downstream buyers due to limited local demand from commercial printing and few bidding orders. US trade policies made customers uncertain about the future market, and they became more cautious about purchases.
On the supply side, production was rising compared with the first quarter as a machine at Chenming restarted in the middle of March and products started entering the market steadily in April, which made the oversupply issue resurface. Pulp prices in China’s local market were in a downward trend, eliminating the support of paper prices from the cost side.
Overall, we are showing CWF paper prices in East China in April (as of April 23) averaged 5,950 yuan per tonne and 5,675 yuan per tonne for the premium grade and commodity grades, respectively, down about 100 yuan per tonne and 150 yuan per tonne from March. Note that prices kept declining in the last several days of April, which will be in the calculations for May prices.
The market for uncoated woodfree paper was also sluggish, and prices declined. For big producers, list prices fell about 100-200 yuan per tonne in April, and they offered even larger discounts for big orders. Lower numbers of bidding orders, falling pulp prices and competition between producers were the main reasons for the price decreases.
Although most of Chenming’s UWF capacity was still idle, the market was not lacking supply as other producers raised operating rates. In addition, more capacity came on line, including one second-hand machine at Guangxi Xianhe Paper and a second machine at Nine Dragons’ Hubei mill, and there are three additional new lines due soon.
Containerboard
The decline in Chinese recycled containerboard prices continued in April with a decrease of up to 80 yuan per tonne in East China, smaller than the drops recorded in March. At the beginning of April, coinciding with the Qingming holiday, shipment prices at some paper mills were discounted 20-50 yuan per tonne.
After the holiday, some mills sought increases of 30 yuan per tonne with moderate success, but a second-round of increases were not successful. Prices then decreased through the end of April.
Sales from mills were better in the first half of the month than in the second. Early in April, buyers, especially those with low inventories, placed orders to stock up for fear that prices would rise. However, because of weak demand, it did not take long to replenish their stocks, so shipments from paper mills slowed in the second half of the month.
The price cuts were primarily caused by weak demand and oversupply. April is still the traditional slow season for containerboard demand. And the continuous changes in trade policy had a major impact on the export market, causing a weaker-than-usual demand performance in South China.
We are also still seeing more capacity come on line in China despite the growing oversupply situation. Anhui Shanying Paper’s 450,000-tonne corrugating medium machine, Zhejiang Dayu Paper’s 100,000-tonne corrugating medium machine and Hubei Wuzhou Specialty Paper’s 550,000-tonne linerboard machine all started in April.
The price of recycled containerboard fell, but the average price of domestic OCC rose 30 yuan per tonne in April, so profit margins at paper mills narrowed further. Several mills scheduled maintenance downtime at the beginning of May due to the sluggish market conditions.
Interested in more insights like this? You can access a free sample of the Fastmarkets Asia paper and pulp monitor here.
