Guotai Haitong Securities released a research report stating that as of August 27, China's AA-grade corrugated paper 120g market monthly average price reached 2,630 yuan/ton, rising 118 yuan/ton from July's average price of 2,512 yuan/ton, representing a month-on-month increase of 4.70%. Large-scale paper mills continued to raise factory prices and issued notices for the next round of price increases, driving bullish market expectations. Small and medium-sized paper mills showed strong willingness to follow the price increases, expanding the scope and magnitude of market price rises. Regarding wood pulp, August import wood pulp spot market prices showed mixed movements, with downstream paper mills purchasing pulp at low prices and insufficient high-price transactions in the pulp market. The consecutive price increases in import broadleaf pulp overseas quotations from August to September added cost pressure for future deliveries. Traders followed paper pulp futures main contract prices upward but were reluctant to follow downward movements, resulting in month-on-month increases in import broadleaf pulp monthly average prices.
Guotai Haitong Securities' main viewpoints are as follows:
Cultural Paper: Publication Orders Nearing End, Supply-Demand Contradictions Persist As of August 27, the August market average price for 70g wood pulp high-white offset paper was 4,957 yuan/ton, declining 128 yuan/ton month-on-month, a decrease of 2.52%, and falling 454 yuan/ton year-on-year, down 8.39%. First, early August saw individual paper mill quotations decline by 100 yuan/ton, driving increased bearish market sentiment. Second, social orders showed no significant improvement during the month, with textbook and teaching material printing work essentially completed by mid-to-late month. Social book merchants showed no concentrated purchasing activities, paper demand remained moderate, distributor shipments were slow, and order prices gradually declined. Third, late-month news of previously halted production lines resuming operations created bearish sentiment among market participants, with paper transactions mainly based on negotiations. Fourth, upstream raw material wood pulp market transactions were driven by rigid demand, with only individual pulp grades showing average price increases, providing limited cost support for offset paper.
White Paperboard: New Industry Capacity Deployment, Profit Margins Decline Month-on-Month As of August 27, the monthly average transaction price including tax for 250-400g sheet white cardboard was 3,948 yuan/ton, declining 2.11% from July and falling 10.76% compared to the same period in 2024. First, new market capacity successively began production, creating significant market competition pressure, with paper mills primarily offering concessions to secure orders and maintain market share. Second, orders for fast-moving consumer goods slightly increased due to Mid-Autumn Festival and National Day holidays. Additionally, with paper prices at bottom levels, some traders restocked at low prices, leading to slight improvements in local market transactions during mid-to-late month. However, overall terminal demand release remained limited throughout the month, providing insufficient market support. Third, costs remained elevated, overall industry profitability faced pressure, and related white paperboard companies successively raised prices, strengthening market intentions to halt declines and slowing the downward trend in late month.
Corrugated Paper: Paper Mills Continue Price Increases, Paper Price Rises Exceed Cost Increases As of August 27, China's AA-grade corrugated paper 120g market monthly average price was 2,630 yuan/ton, rising 118 yuan/ton from July's average price of 2,512 yuan/ton, a month-on-month increase of 4.70%. First, large-scale paper mills continued raising factory prices and issued notices for the next round of price increases, driving bullish market expectations with strong willingness from small and medium-sized paper mills to follow price increases, expanding the scope and magnitude of market price rises. Second, main raw material waste paper prices increased, and under industrial chain linkage effects, costs provided clear support for corrugated paper prices, favoring paper price increases. Finally, downstream packaging factories increased bullish expectations and showed high restocking enthusiasm, transferring paper mill inventory pressure to downstream segments and shifting market transaction focus upward.
Wood Pulp: Broadleaf Pulp Overseas Quotations Rise, Supply-Demand Expected to Improve Modestly August import wood pulp spot market prices showed mixed movements, with downstream paper mills purchasing pulp at low prices and insufficient high-price transactions in the pulp market. First, Shanghai Futures Exchange paper pulp futures main contract prices operated in range-bound fluctuations, driving import softwood pulp spot prices to surge and retreat. Due to more declines than increases during the month, softwood pulp monthly average prices fell month-on-month. Second, consecutive price increases in August-September import broadleaf pulp overseas quotations added cost pressure for future deliveries. Traders followed paper pulp futures main contract price increases but were reluctant to follow declines, resulting in month-on-month increases in import broadleaf pulp monthly average prices. Third, import natural pulp demand follow-through was insufficient, with market participants offering concessions for shipments, driving monthly average prices down month-on-month. Fourth, import chemimechanical pulp had limited available sources for external sales, with market participants continuing to ship at previously raised prices, leading to month-on-month increases in monthly average prices.
Risk Warning: Overseas wood pulp supply chain disruptions, downstream consumption demand falling short of expectations.