The downturn of China's paperboard market and factory shutdowns have led to the decline of OCC import prices in Southeast Asia and Taiwan, China, China

March 10, 2023

As China lifted the restrictions on the covid-19 epidemic, the price of OCC soared; With the decline of demand, the price of OCC has changed.

March 7, 2023 - In the past few weeks, the import price of waste corrugated boxes (OCC) in Asia has declined in an all-round way, and the waste corrugated boxes from the United States and Europe have dropped by 10-20 dollars per ton in Southeast Asia (SEA) and Taiwan.
From the beginning of January to the beginning of February, the price of these products increased by 20-30 dollars per ton in the region.
During this period, due to the reopening after the epidemic, the Chinese government cancelled most of the import tariffs on paper and paperboard, and China's imports of packaging materials and waste pulp produced in Southeast Asia and Taiwan, China surged, which triggered a surge in the procurement of OCC in the region.
At the same time, overseas procurement departments of top manufacturers from Southeast Asia, Taiwan and Chinese Mainland are chasing the number of OCC in the United States and Europe, pushing up the FAS price of OCC there.
However, China Nine Dragons Paper and Shanying International unexpectedly announced a large-scale shutdown and exploded in the market, which may prove that the price rise caused by China is only a mirage.
More importantly, the price of packaging materials in China has been falling, and major manufacturers are competing with a large number of low-priced imported products.
The demand for Packaging Paper is on the decline

Relevant people reported that the sudden change of China's packaging market from prosperity to depression has brought the export of packaging products from Southeast Asia and Taiwan, China to Chinese Mainland to a standstill.
In addition, the source pointed out that the packaging materials shipped from China have been sold in India, while the packaging materials produced by Chinese affiliated factories in Malaysia are sold in Indonesia instead of being shipped back to China.
The factories in Southeast Asia and Taiwan have noticed these negative signs, indicating that the packaging demand driven by China is rapidly dissipating, and is driving the price reduction of OCC imports, while reducing the quantity.
It is reported that the main buyers asked to reduce the price of DS OCC 12 to US $165/ton, while the seller's offer was US $175-180/ton; The lowest price of European OCC 95/5 is 128 dollars/ton, while the seller's quotation is 145 dollars/ton.
The major suppliers in the United States and Europe have kept their quotations and refused to make concessions. They told Asian customers that they had no inventory pressure because they were dealing with the backlog of goods and had received a large number of orders in the past two months. These large-scale suppliers believe that Chinese enterprises will continue to obtain OCC to manufacture recycled pulp in their SEA plants.
A Chinese manufacturer agreed. He said that the demand for OCC from recycled pulp mills in Southeast Asia would continue, but the purchase volume was decreasing.
The source said: "When the price of DS OCC 12 in the United States was 195 US dollars/ton last month, we began to buy the paper products. Then we got the news that other Chinese enterprises reduced the quantity and price in the United States and Europe, and we also reduced the tonnage. The price then fell, and we stopped buying."
He added: "We expected that the price of high-quality paper in the United States would drop to about 185 US dollars per ton, and then hover at this level. Looking back, our judgment is wrong."
However, speculative traders bear the brunt of the volatility. They were forced to sell the stocks they purchased, resulting in a drop in prices.
OCC price level drops

The price of DS OCC 12 in the United States in Taiwan and Southeast Asia this week was $170-175/ton, in addition to Indonesia and Malaysia, compared with $190-200/ton two weeks ago. Both countries require pre-shipment inspection in the country of origin, and the price is usually higher.
The evaluation price of the benchmark OCC 11 in the United States also decreased accordingly, with a decrease of US $10-15 per ton to US $165-170 per ton. The price of OCC 95/5 in Europe fell by US $10-20/ton to US $135-140/ton. Japan OCC fell by US $10 per ton to close at US $155-160 per ton.

Source: fastmarkets

Author:

Mr. Ma Yanfeng

E-mail:

sandy@zhongzhi.cn

Phone/WhatsApp:

8615200088110