Analysis of China’s Paper Industry: National Production of Machine-Made Paper and Paperboard Reached 158.469 Million Tonnes

Analysis of China’s Paper Industry: National Production of Machine-Made Paper and Paperboard Reached 158.469 Million Tonnes

-The below report is based on Fy 2024 ( 1st Jan to 31st Dec. 24)
-the average market price of softwood pulp in Shandong was RMB6,400 per tonne, representing an increase of 9.4% from the beginning of the year.
- the growth in sales of paper products remained slow due to the global economic slowdown and sluggish domestic consumer demand.
The Pulp and Paper Times

As a basic raw material industry closely related to economic and social development, the paper industry of China experienced a complex and volatile development process against the backdrop of fluctuating raw material prices, increased supply of paper products, slow growth in sales, and short-term supply and demand tensions in 2024.

On the raw material side, the raw materials for the paper industry primarily include wood pulp, among others. In 2024, the prices of softwood pulp and hardwood pulp were affected by both unexpected international supply disruptions and the release of new domestic production capacity, showing a mixed trend of upward and downward movements.

For softwood pulp, due to labour strikes and maintenance at pulp mills in major international suppliers of softwood pulp such as Finland, Chile and Canada in the first half of the year, its supply tightened, which pushed up its price. However, with the release of new domestic pulp production capacities, supply pressure increased and overseas demand weakened, and thus the price fell again. As of 31 December 2024, the average market price of softwood pulp in Shandong was RMB6,400 per tonne, representing an increase of 9.4% from the beginning of the year.

For hardwood pulp, its price trend was different from that of softwood pulp, which demonstrated an overall decline. As of 31 December 2024, the average market price of hardwood pulp in Shandong was RMB4,610 per tonne, representing a decrease of 8.53% from the beginning of the year.

On the supply side, the paper industry saw a continuous increase in the supply of paper products driven by new production capacity in 2024. From January to December 2024, the national production of machine-made paper and paper board reached 158.469 million tonnes, representing a year-on-year increase of 8.6%. According to statistics, as of the end of October 2024, the number of papermaking enterprises nationwide reached 7,999, representing an increase of 331 from the end of 2023. As an important component of the paper industry, the paper and paperboard manufacturing sector saw cumulative year-on-year growth of 20.6% in its fixed asset investment, demonstrating strong momentum of investment growth.

On the demand side, despite the continuous increase in supply in the paper industry, the growth in sales of paper products remained slow due to the global economic slowdown and sluggish domestic consumer demand. Product prices struggled to rise, with overall price levels lower than the same period in the previous year.

For the price of culture paper, the price of culture paper experienced a fluctuation process of rising first and then falling in 2024. At the beginning of the year, the price of culture paper rose due to market demand and adjustments in supply-side production capacity. However, as end-user demand weakened and the orders for finished paper decreased, the prices of bulk paper continued to decline, leading to a drop in the price of culture paper. In particular, starting from May, both the price and profit fell to historically low levels. Although the price of culture paper recovered in late November due to short-term supply contractions and the concentrated delivery of tender orders, the current prices of duplex press paper and coated paper remain at relatively low levels.

For the price of white cardboard, the white cardboard sector also faced significant challenges in 2024. Affected by the substantial release of new supply in the previous period and the relatively slow recovery of end-user demand, the price of white cardboard remained in a downward trend, with a profitability level near the lowest point in history. Although the state subsidy for new home appliances had been gradually extended to small kitchen appliances in certain regions, which provided some boost to industry demand, the overall sector still faced considerable competitive pressure.

The paper industry needs to pay close attention to policy changes and the recovery of market demand, strengthen technological innovation and digital transformation, and enhance its core competitiveness and market adaptability in order to achieve sustainable development.

The above report on China paper industry has been extracted from Shandong Chenming Paper Holdings’ annual report for FY 2024
 

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