NEWS
Packaging paper prices increased slightly
Packaging paper prices increased slightly due to thesupport of local OCC prices. Around 60 packaging paperfactories raised prices by 50~450/t, mainly due to the stricterexamination of imported OCC, which is driving factories to turnto local OCC. The downstream remains cautious despite thestrong willingness to raise prices upstream. We believe prices willfluctuate in June due to weak demand.
Prices of ivory board remain stable, thanks to theproduction limits of the top four players; around 100k tonnes ofsupply has been cut, helping to stabilize prices. The inventorylevel is still relatively high; no increase in supply of art paper andoffset paper has occurred, helping prices to stay at a high level.
Keep a close eye on packaging paper’s new capacitypipelines. Our statistics show that total annual output of 1.3mntonnes has been put into operation YTD, all of which is in EasternChina. We estimate that capacity of 6.1mn tonnes will bedelivered this year. If so, paper prices will be suppressed, evenwhen the peak season starts in 2H17.
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