Chinese paper and board markets faced challenges in April due to the ongoing trade war. Data indicated a decline in Chinese exports to the US, while exports to Southeast Asia and Europe saw an increase. Despite some positive signals, overall concerns for the economy grew as export orders dropped and the Purchasing Managers’ Index fell below 50, signaling economic constraints.
Anecdotal reports highlighted slowing activity in export-oriented businesses, with retail sales showing relative health in March. However, the economy is expected to remain restrained in the coming months as negotiations continue and high tariffs persist. The recent reduction in tariffs is seen as a positive development, but uncertainties linger, affecting market dynamics.
In the printing and writing paper sector, Chinese woodfree paper prices declined in April due to weak demand and falling pulp prices. Coated woodfree paper faced weak demand from downstream buyers, impacted by trade policies and cautious purchasing behavior. Production levels increased, leading to oversupply issues, further pressuring prices.
Similarly, uncoated woodfree paper prices dropped in April as big producers offered discounts to stimulate demand. Despite idle capacities, the market saw ample supply, with new production lines coming online. The containerboard segment also experienced price declines, driven by weak demand and oversupply, exacerbated by trade policy changes.
Recycled containerboard prices continued to decrease in April, with some mills offering discounts and seeking price increases with limited success. The market dynamics led to slower shipments in the latter half of the month. The oversupply situation persisted, with new capacity additions further impacting prices and profit margins at paper mills.
The market conditions in China’s paper industry reflect the broader economic challenges faced amid trade disputes. As trade policies evolve and economic uncertainties persist, the paper and board markets navigate through pricing pressures and demand constraints. Industry players must adapt to changing market dynamics and monitor supply-demand balances to stay competitive in a challenging environment.
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