NNEWS CENTER

Recently, leading companies in the packaging paper industry, such as Nine Dragons Paper, have announced another round of price increases for their products. This latest adjustment primarily affects various types of paper including containerboard, corrugated paper, and kraft paper. Concurrently, there has been a steady upward trend in the prices of waste paper, which is a key upstream material in the industry. According to Xu Ling, a market analyst for corrugated and containerboard paper at Sublime Information, “The second quarter is traditionally the off-season for the packaging paper market, especially for containerboard. As we move into the third quarter, the market gradually shifts into its peak season, with improving demand. This could lead to a more balanced supply-demand relationship and a potential increase in market prices.”

Dongxing Securities recently released a research report suggesting that as we enter the traditional peak season, paper prices are expected to benefit from the release of pent-up demand. Currently, the rising prices of U.S. waste paper are narrowing the cost advantages of imported paper. This will likely reduce the impact on the supply side, thereby helping paper companies to maintain stable prices during the off-season and implement price increases during the peak season.

The packaging paper industry has faced significant challenges over the past few quarters due to fluctuating demand and supply chain disruptions. However, with the anticipated recovery in downstream demand, the outlook for the third quarter appears optimistic. Major players like Nine Dragons Paper have taken proactive steps by adjusting their pricing strategies to reflect the changing market conditions.

The steady increase in waste paper prices is a critical factor influencing the overall cost structure of the industry. As waste paper is a primary raw material, its price fluctuations directly impact the production costs of packaging paper. The recent stability and gradual increase in waste paper prices suggest a tightening of supply, which could further drive up the costs of packaging paper.

Market analysts predict that the third quarter will see a rebound in demand as businesses ramp up their operations post-pandemic. This increase in demand is expected to ease the supply-demand imbalance that has characterized the market in recent months. With more balanced market conditions, paper companies are in a stronger position to pass on cost increases to their customers, thereby stabilizing and potentially increasing their profit margins.

Dongxing Securities’ research emphasizes that the traditional peak season for packaging paper is poised to bring about a resurgence in demand. The rising prices of U.S. waste paper have reduced the cost benefits of imported paper, leading to a more level playing field for domestic producers. This scenario is favorable for domestic paper companies, as it diminishes the competitive pressure from cheaper imports and allows for better control over pricing.

In conclusion, the packaging paper industry is on the cusp of a seasonal upswing driven by recovering demand and strategic pricing adjustments by leading companies. The alignment of these factors suggests a positive outlook for the third quarter, with potential price increases benefiting the industry’s overall performance.