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Rengo announces big slowdown in corrugating medium production in Japan

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Rengo announces big slowdown in corrugating medium production in Japan

July 17, 2014 - 18:47

MELBOURNE, Australia, July 18, 2014 (PPI Asia) -Japanese packaging giant Rengo has announced a significant slowdown in the production of corrugating medium in response to the slow domestic market.

In June, its production rates were 25% or 25,000 tonnes below June 2013 levels, and shipments of the grade dipped 15%, or 13,000 tonnes.

It is planning to produce corrugating medium 30% below July 2013 levels this month - a difference of 31,000 tonnes. What's more, it announced it was willing to curtail production by an additional 5,000 tonnes, if necessary.

This is with the estimation shipments will be 20% or 19,000 tonnes below levels seen at this time last year.

Rengo has not announced a planned production rate for August, explaining it will check inventory levels before coming to a decision.

However, the firm expects August production and shipments will once more be below historical norms for the month.

Rough market:Rengo's announcement comes as the Japanese corrugating medium market goes through hard times.

As well as stagnant demand, it is seeing dwindling prices and higher material costs.

Prices for corrugating medium are around ¥53-54 per kg, down 7% from the middle of last year.

Simultaneously, due to demand from overseas markets, the cost of recovered paper furnish has shot up by up to 50%.