China’s Corrugated Paper Market Under Pressure in Jan–Aug 2024 as Import Impact Returns to Normal

From January to August 2024, the corrugated paper market moved downward amid volatility, with the main bearish drivers being supply-demand imbalances and a pullback in costs. Domestic demand recovered at a slow pace and paper prices fell in tandem, curbing purchase interest in imported corrugated paper; monthly import volumes gradually moved closer to the five-year average, and the impact on the domestic market eased accordingly.

Imported paper is one component of total corrugated paper supply and competes directly with domestic material. After the 2023 tariff policy adjustment, import costs fell and the advantage widened, delivering a notable impact on the domestic market. Data from the General Administration of Customs show that China’s corrugated paper imports reached 3.59 million tonnes in 2023, up 47.74% year on year. In 2024, the “zero tariff” policy continued and the import advantage remained, but import volumes turned lower: cumulative imports from January to July were 1.7745 million tonnes, down 11.82% year on year. The decline was mainly linked to insufficient import demand, weaker domestic paper prices and the international situation.

The Domestic Market Remains Quiet, Limiting Import Demand

Domestic demand recovery for corrugated paper was limited in 2024. Monitoring by Zhuochuang Information shows that domestic corrugated paper consumption from January to July increased 2.13% year on year, a slow pace. The consumption boost from Chinese New Year, May Day and e-commerce promotions was weaker than in previous years; market feedback indicates no clear increase in end-use packaging material stocking, packaging plant orders fell short of expectations and order continuity declined. Most players replenished only for immediate needs and stayed cautious, waiting to see how the market would develop. Imported paper shipping schedules are generally 45–60 days, making delivery timeliness less competitive than domestic spot supply; in a persistently weak demand environment, players had limited confidence in the market, import paper traders stocked cautiously, and import demand from downstream and end customers also contracted.

Looking at the registered locations of consignees and consignors for corrugated paper imports, import demand is generally concentrated in eastern coastal areas such as Guangdong, Fujian, Zhejiang, Jiangsu, Shandong and Shanghai. These regions are both major hubs for import paper traders and core consumption areas for corrugated paper, making them more sensitive to demand shifts. From January to July, total corrugated paper imports into these provinces fell 8.80% year on year, confirming the year-on-year decline in domestic import demand.

Falling Domestic Prices and Rising Import Costs Squeeze Arbitrage

On the domestic paper side, supply-demand tensions were prominent in China’s corrugated paper market in 2024 and prices declined. New capacity from January to August approached 1.2 million tonnes; as downtime was concentrated at small and medium-sized units, total output rose year on year, adding supply-side pressure. Demand recovered slowly, effective end-use demand failed to follow through, and the oversupply pattern persisted.

In addition, upstream raw material prices fell more often than they rose during the year, weakening cost support. With bearish forces from both supply-demand and costs, mills adjusted prices frequently and corrugated paper prices trended downward in a volatile manner. As of 22 August, the average market price of China AA-grade 120g corrugated paper stood at RMB 2,609/tonne, down 4.68% year on year and 10.80% from the end of 2023.

On imported paper, international factors pushed up import costs. In 2024, an unstable global environment led to notably higher sea freight costs and longer transit times, further reducing the stability of international freight; sea and rail transport, the main modes for corrugated paper imports, were significantly disrupted. As a result, imported paper freight rates rose and some offers moved up, eroding the price advantage and creating a bearish factor for imports. Frequent exchange-rate fluctuations during the year also affected imports.

The decline in domestic paper prices and higher import costs narrowed the arbitrage window for imported corrugated paper, dampening import enthusiasm; volumes generally trended down from January to July. Taking shipping schedules into account, January imports were mostly orders placed at the end of 2023; March volumes, supported by the continuation of the “zero tariff” policy and Chinese New Year stocking orders, reached 362,200 tonnes, a five-year high. After that, as domestic paper prices fell markedly, monthly imports declined and gradually returned to the average level of the past five years.

Overall, the supportive effect of the 2024 import tariff policy on corrugated paper import volumes weakened. With slow domestic demand recovery, lower paper prices and international bearish factors, import enthusiasm declined. Domestic demand is expected to improve in the third and fourth quarters, but competition at home remains intense and international headwinds are unlikely to be absorbed in the short term. Corrugated paper imports from August to December are expected to be close to the five-year historical average, with second-half volumes slightly higher than the first half and full-year imports down year on year from 2023.

Reprint source: China Packaging Network (pack.cn); original article: http://news.pack.cn/show-379637.html