Power Rationing, Diesel Caps and Base Paper Hikes Push Carton Prices Higher — Per-Order Quotes Become the Norm

Rotating shutdown patterns such as “five days on, two days off” and “three days on, four days off” are spreading, with another major chemicals province joining power rationing. Industrial electricity rates in Jiangsu, Zhejiang, Guangdong and other regions have been raised, with the steepest increase reaching 80%.

After diesel prices approached the 7-yuan threshold, fuel costs per 100 kilometers rose by 90 yuan. More troubling, the diesel squeeze is deepening: service stations have shifted from a 100-liter cap to a 100-yuan cap, and soaring logistics costs are now imminent.

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Industrial base paper and paperboard have, unsurprisingly, raised prices again. On October 21, Shanying issued a price increase notice, lifting the full range at each base by 100 yuan per tonne.

Meanwhile, Hangxing New Materials and Xinxiang Hongtai also continued to issue price increase notices, each raising prices by 100 yuan per tonne.

How will industrial base paper move in November? The market is watching closely; in white card at least, a price increase is a foregone conclusion. On October 22, Chenming and APP, two white card suppliers in a monopolistic position, announced that white card prices would rise by 300 yuan per tonne from November 1.

As raw material, electricity and energy costs climb rapidly, secondary paperboard plants can no longer hold out. From October 20 onward, price increase notices have appeared one after another; counting from September, there have already been six full rounds of consecutive increases.

Unlike earlier rounds, some paperboard plants in this round are limiting order quantities, generally using their average daily order intake in August-September as the maximum. Even within the same region, paperboard plants are diverging in their pace of price increases.

With paperboard plants limiting quantities and raising prices, 7-10 day delivery times have become the norm for carton plants. For new orders, re-quoting before each order is now almost customary.

Nearly every round of base paper price increases triggers ripples through the midstream and downstream. Whether companies absorb the cost or pass it further down the chain, this supply-side shock is still continuing.

This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378502.html