Southeast Asia: Demand increases, driving up box packaging paper prices

Demand for consumption increased in China, exports to Europe and America also increased, China was about to stop importing RCP completely ... are some of the reasons leading to demand. Paper box packaging in Southeast Asia is being improved.

Demand for box packaging paper produced from recovered paper materials in Southeast Asia tends to improve in the third quarter of 2020. The reason for the increase in prices for this product in the region is due to the increase of domestic demand in the Chinese market, and higher cost of recovered paper (RCP) in the third quarter.

At the end of the third quarter, the prices of the types were unchanged from August, but the prices of the types surveyed increased by 10 USD / ton to 400-490 USD / ton for the kraft-top liner paper, 350 -410 USD / ton for testliner and 320-370 USD / ton for corrugated paper. Gray coated duplex paper increased to 450-510 USD / ton from 450-500 USD / ton, white coated duplex paper to 550-610 USD / ton from 550-600 USD / ton compared to the price in July and August.

Market observers have reported that the demand for recycled packaging paper has increased again in Cambodia, Thailand and Vietnam, which are the three countries with the lowest COVID-19 prevalence rates in the region. from Q2 and the domestic economy has gradually returned to normal. Demand in Indonesia and the Philippines is believed to be weaker, with both countries facing high rates of infection and limited business or movement restrictions. The rest of Southeast Asia countries have low number of cases.

Although not yet turned into a boom in regional demand, the consumer market has seen an increase in packaged exports to North America and Europe, despite the spread of COVID-19 in the two regions. this area.

Customer interest and demand from the Chinese market were the main drivers of improvement in Southeast Asia's recycled industrial packaging paper during this period. China's economy is resuming after localities stabilized and controlled COVID-19 contamination, and raw material demand as the Chinese paper industry has to take into account the impact of import cessation. completely RCP from the beginning of 2021.

With demand recovery, the operating rate of recycled box paper factories in Southeast Asia has also increased. Regarding RCP costs, since Chinese buyers have to ensure sufficient time to complete customs clearance by the end of 2020, the purchase of RCP for import into China is ending in October 2020.

However, Chinese paper and paperboard manufacturers are increasingly investing in new capacity for recycled packaging paper and recycled pulp elsewhere - particularly in Southeast Asia - hence the demand for RCP. in the medium term may remain stable. That will keep the cost of RCP in Southeast Asia high enough and will continue to be a cause for manufacturers to look for ways to raise prices.

Researchers and market analysts believe that, in the coming time, demand for recycled box paper in Southeast Asia will continue to improve, as the import ban on RCP in China actually has takes effect from January 2021 and the world economy gradually recovers from the COVID-19./ pandemic.

Source: Fastmarkets RISI