Chinese board prices stable over last month of 2014 as hike efforts fail

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Chinese board prices stable over last month of 2014 as hike efforts fail

January 01, 2015 - 15:27

SHANGHAI, Jan. 2, 2015 (PPI Asia) -The Chinese paper and board market was mostly flat in December, with only some prices seeing slight declines.

Levels for all surveyed coated fine paper (CFP) grades were unchanged. Premium end CFP prices remained at RMB 5,400-5,550/tonne ($871-895/tonne), the same as in November.

Commodity CFP grades were flat at RMB 5,000-5,050/tonne.

APP China announced a hike of RMB 100/tonne, but did not get it through. Other producers had also mulled over price rises in the past several months, but most backed off due to poor demand.

Sources said that CFP prices, which lingered at low levels over the whole of 2014, would be difficult to boost in the near future on the oversupplied market.

On the uncoated fine paper (UFP) side, prices softened by up to RMB 50/tonne in early December.

The grade made with 100% chemical wood pulp moved down to RMB 6,100-6,200/tonne from RMB 6,150-6,200/tonne. The grade made with mixed chemical and mechanical pulp also saw small dips, to RMB 5,450-5,600/tonne from 5,500-5,600/tonne.

UFP furnished with mixed wood and nonwood pulp declined to RMB 5,000-5,300/tonne from RMB 5,100-5,300/tonne.

Public bidding for next semester's school materials has wrapped up, and small, low-end UFP producers are now busy with those orders.

However, overall demand for major producers' UFP, for which the major furnish is chemical wood fiber, has been slack.

Several producers have announced a price hike of around RMB 100/tonne for January.

But a trader indicated it would not be easy to implement it.

The source explained that while mills that struck school material deals will be busy with those orders in January, overall market supply is ample, and orders unrelated to textbooks have not increased.

Packaging stable:Board prices were quite stable in December.

After small dips in November, recycled containerboard prices stabilized last month. Testliner and kraft-top linerboard were flat at RMB 2,830-3,040/tonne and RMB 3,110-3,290/tonne respectively, and high-strength corrugating medium levels were unmoved at RMB 2,580-2,870/tonne.

The stabilization could be due to rising domestic old corrugated container (OCC) prices, which inched up around RMB 50/tonne to RMB 1,270-1,480/tonne, and to producers' price hike efforts.

Some producers tried to raise board prices by RMB 50-100/tonne in December, but their attempts failed due to the poor economic situation.

On the supply side, Fujian Liansheng Paper's Longhai mill in Fujian province has suspended production due to a big fire on December 23. The blaze hit a warehouse where its recycled containerboard output was stored.

The mill houses two recycled containerboard PMs with a combined capacity of 650,000 tonnes/yr. It is unknown when they will resume production.

Some other mills are mulling over price hikes due to the downtime and stock loss, but so far the fire has not made a big impact on overall board availability.

In Jiangsu province, Nine Dragons Paper (Holdings) will curtail its recycled containerboard production by around 90,000 tonnes in February at its Taicang mill.

Four PMs there will take maintenance-related downtime in turn around the approaching Lunar New Year holiday, which will fall on February 19.

Market sources reported that the downtime will start in early February and last for a month.

On the cartonboard front, prices for premium coated ivory board remained flat at RMB 6,050-6,300/tonne, and commodity coated ivory board levels slipped from RMB 4,850-5,200/tonne to RMB 4,800-5,200/tonne.

Grayback coated duplex board prices were stable, with the premium and commodity grades unchanged at RMB 3,800-4,300/tonne and RMB 3,250-3,500/tonne respectively.

Nine Dragons announced a price increase of RMB 50/tonne for grayback coated duplex board output from its Taicang plant in December, but it was not fully implemented.

At the site, the giant runs one grayback coated duplex board PM with a capacity of 430,000 tonnes/yr, which is planned to be rebuilt at the end of January.

The two-week long overhaul will cut supply by around 16,000 tonnes.

By Rita Yao, News Editor,PPI Asiaryao@risi.com