Energy Dual-Control Sparks Paper Price Wave: Nine Dragons, Shanying, Lee & Man and Peers Hike Prices as Converters Follow With 3% Increases

China's dual-control of energy consumption policy continues to spread, and its fallout for papermakers and packaging producers keeps widening. With costs climbing on one side and machine shutdowns cutting output on the other, Nine Dragons, Shanying and other mills have fired off price increase notices in rapid succession, driving domestic recovered paper, base paper and paperboard prices sharply and broadly higher.

Several Nine Dragons mills moved in unison, announcing same-day base paper hikes of as much as RMB 150. At Dongguan Nine Dragons, every kraft linerboard and corrugating medium grade is up RMB 100, quoted in both RMB and HKD, with white-top kraft linerboard and coated kraft linerboard included. Nine Dragons, Hailong and Dilong brand white board paper also rose RMB 100 in RMB and HKD terms, while Jianglong brand white board paper went up RMB 150.

All kraft paper and corrugated paper grades: up RMB 100 per tonne on top of prevailing prices.

Jiangsu Taicang mill:

Full kraft and corrugated paper range: up RMB 100 per tonne over current prices.

Tianjin/Hebei mill:

Full kraft and corrugated paper range: up RMB 100 per tonne over current prices.

Full kraft and corrugated paper range: up RMB 100 per tonne over current prices.

Quanzhou Nine Dragons Paper:

Kraft linerboard and recycled paper: discounts withdrawn, prices up RMB 50-100 per tonne; corrugated paper up RMB 100 per tonne.

Another papermaking heavyweight

also declared that from September 25 all base paper would rise RMB 50-200 per tonne, followed by a further RMB 200 per tonne increase on all base paper from October 8.

Shandong Depaike Paper Co., Ltd.:

With coal prices rising and power rationing cutting output, operating cost pressure has intensified sharply. The company will raise all yarn tube paper sales prices by a uniform RMB 100 per tonne above previous levels from September 24, 2021.

Qinhuangdao Jinmaoyuan Paper Co., Ltd.:

As raw materials have kept climbing recently and production costs have risen substantially, the company's yarn tube paper sales prices increase by RMB 100 per tonne above previous levels with immediate effect.

MCC Meili Cloud Industry Investment Co., Ltd.:

Citing national energy-saving and emission-reduction policy as well as environmental rules, the company will lift prices on all of its colour paper grades by RMB 300 per tonne above currently executed levels from September 26.

Guangdong Lee & Man Paper:

Selected kraft linerboard grades: up RMB 50 per tonne

Liansheng Paper (Longhai):

All kraft linerboard other than premium grades: discounts withdrawn, prices up RMB 100 per tonne; Liansheng Paper (Longhai) high-strength corrugated paper up RMB 100 per tonne

Dongguan Jinzhou Paper:

Q paper up RMB 50; corrugated paper up RMB 50 per tonne

Dongguan Yinzhou Paper:

Containerboard up RMB 50 per tonne

Sichuan Litian Paper:

Corrugated paper up RMB 50 per tonne

Hubei Golden Phoenix Paper:

High-strength corrugated paper up RMB 50 per tonne

Zhejiang Huachuan Paper:

High-strength corrugated paper up RMB 50 per tonne

Guangdong Zhongshan Yongfa Paper:

High-strength corrugated paper of 70 gsm and below up RMB 100 per tonne

Zhejiang Yiwu Yinan Paper:

High-strength corrugated paper up RMB 50 per tonne

Henan Yadu Paper:

Corrugated paper up RMB 50 per tonne

Zhangzhou Yingsheng Paper:

High-strength corrugated paper up RMB 50 per tonne

Zhangzhou Youlida Paper:

Corrugated paper up RMB 100 per tonne

Jiangmen Qiaoyu Paper:

Corrugated paper up RMB 50 per tonne

Sichuan Chengdu Xunyuan Paper:

Corrugated paper up RMB 50 per tonne

Chengdu Xunyuan Paper:

Containerboard up RMB 50 per tonne

Shandong Fengyuan Zhongke:

Corrugated paper up RMB 100 per tonne

Henan Henry Paper:

High-strength corrugated paper discounts withdrawn

Jilin Changbaishan Qixiang Paper:

Corrugated paper up RMB 50 per tonne

Raw material inflation forces midstream and downstream players to follow

The abrupt surge in raw material costs has overwhelmed the paperboard and carton plants that had been running close to the cost line since September, turning break-even production into loss-making output almost overnight. Ringed by an ever-growing stack of base paper increase notices, paperboard converters opted to follow suit. On September 24, Zhejiang Xiangheng Packaging Co., Ltd. and Zhejiang Bolaite Paper Container Co., Ltd. issued increase letters, lifting paperboard prices by 3%.

In parallel, a string of Jiangsu paperboard plants issued notices of their own, also raising paperboard prices by 3%. By this stage the increases had formed a contiguous front and were spreading rapidly outward, gradually gathering into a broad wave.

On September 25, a large group of Ningbo paperboard plants joined the movement. Cixi Fushan, Ningbo Chunhui, Wenkang Packaging, Xincheng Packaging, Hexi Packaging - within barely more than an hour, several converters had rolled out increase letters, and further notices from more regions and more factories are expected to appear over the coming two days. The wave that began with power rationing and machine shutdowns is now surging in.

The notices state that raw material inflation has left paperboard plants unable to absorb the pressure of higher base paper prices, hence the adjustments. The increases are: RMB 0.05 per double square for two-layer board; RMB 0.1 per double square for three-layer board; RMB 0.2 per double square for five-layer board; RMB 0.3 per double square for seven-layer board. At these announced levels, the rises essentially cover the added cost created by base paper increases.

One point merits attention: although October is approaching, the peak demand season in end markets has still not begun, so the cost test facing midstream and downstream packaging enterprises in 2021 will inevitably be tougher than in previous years.

This article is reprinted from China Packaging Network (pack.cn); original link: http://news.pack.cn/show-378314.html