1.     Significant Decrease in Imports and Exports of Printing and Writing Paper in the United States in the First 8 Months of 2023

The demand for printing and writing paper in the United States during the first 8 months of 2023 has decreased by approximately 26.5% compared to the same period last year. Shipments from factories to the domestic U.S. market have decreased by 25.4%, while exports have declined by 4.2% in the month. Paper imports have also seen a lower reduction of 32.4% during this period.

Billerud will temporarily shut down its paper mill in Escanaba, MI for annual maintenance for about two weeks in early October to align production with demand. SyIvamo also plans to halt its Ticonderoga, NY, US plant for the entire month of October.

Regarding coated paper, the top two capacity producers, Sappi and Billerud, have plans to convert their capacity into folding boxboard (FBB) by 2025. Sappi is set to convert its CFS paper machine of 260,000 tons/year at the Somerset, ME plant into 520,000 tons/year of SBS in the latter half of 2025, while Billerud plans to convert a paper machine producing both CM and CFS at the Escanaba, MI plant into FBB by 2025.

2.    Increased Imports and Exports of China's Corrugated Paper in August 2023 Compared to the Same Period Last Year

In August 2023, the export volume of corrugated paper reached approximately 4.1 thousand tons, marking a 34.4% increase compared to the same period last year. The export value amounted to 4.6 million USD.

The import volume of corrugated paper reached about 277.4 thousand tons, showing a 66.5% increase compared to the same period last year, with an import value of 102 million USD.

3.    Chenming Paper Reaches Full Production Capacity, Paper Prices on Steady Rise

In the first half of this year, due to lower consumption demand and restricted export markets, the paper manufacturing industry hit bottom, with the white board market significantly affected, resulting in a 23.3% average market price decrease compared to the same period in 2022. In this context, the operational efficiency of most publicly-listed paper companies decreased in the first half of the year, and many leading paper companies, including Chenming Paper, experienced significant declines in revenue and prices, particularly for white board. Supply increased but demand didn't match, leading to price reversals and cost issues.

Recently, as the economy gradually recovers, paper companies have been issuing price increase announcements, and paper prices are expected to rise rapidly as the market starts to recover. Chenming Paper, in particular, has announced price increases for printing and writing paper as well as white board. The company has enough orders and its production lines are running at full capacity.

Additionally, during peak months when cheap pulp arrives at the port and is consumed, the paper production industry's Q3 profits are expected to benefit from reduced costs.

4.    Cao Long Paper Initiates 1.55 Million Tons/Year P&B Production in China in Q4, Several Projects Delayed or Canceled

Cao Long Paper plans to start up a total capacity of 1.55 million tons/year of paper and board (P&B) at a new plant in Bac Hai city, Guangxi Autonomous Region, in Q4. The new production lines will include an 800,000 tons/year kraftliner machine, a 550,000 tons/year uncoated premium paper machine, and a 200,000 tons/year mechanical pulp line. However, many paper and pulp projects have been postponed or canceled due to market changes.

At the Bac Hai facility, the operation of a 1.2 million tons/year bleached NBSK paper machine and a 200,000 tons/year kraft paper machine for bags will be postponed to Q3 2024 and Q4 2025, respectively. Previously, both machines were planned to start in Q1 and Q2 of 2024.

Furthermore, a 600,000 tons/year mechanical pulp line and a 1.1 million tons/year chemical pulp line at the new plant will be delayed by half a year to Q2 2024, according to Cao Long's latest plan.

The company has also decided to cancel a 300,000 tons/year kraftliner machine and a 450,000 tons/year white top linerboard machine at the Bac Hai plant. In addition to these changes at the new Bac Hai plant, Cao Long Paper has also launched a 600,000 tons/year recycled pulp project at its Selangor plant in Malaysia. The Selangor plant currently has a 600,000 tons/year testliner machine and a 300,000 tons/year corrugating medium paper machine, both of which began operations earlier this year.

Two wood pulp production lines planned in Southeast Asia have also been delayed. The start-up of a 100,000 tons/year line in Vietnam and a 210,000 tons/year line in Malaysia has been postponed to this quarter and Q1 2024, respectively.

5.    U.S. and European OCC Prices Increase by 5-15 USD/Ton in Southeast Asia and Taiwan

Large overseas paper buyers in China have continued to aggressively seek supplies of brown recycled paper from the U.S. and Europe to deliver to Asia, while finding ways to increase their import prices in Southeast Asia (SEA) and Taiwan.

Sources report that these customers have paid as much as SEA-CIF equivalent to 200 USD/ton for U.S. DS OCC 12 and 150 USD/ton for European OCC 95/5. Forced to incur higher sourcing costs from the U.S. and Europe, other suppliers, especially those engaged in border trade, have had no choice but to raise prices for these grades in the region.

6.    Paper Excellence Resumes Operations at Crofton Mill in Canada

Paper Excellence has resumed production of kraft pulp at its Crofton mill in British Columbia, Canada, after a three-month shutdown. The mill produces northern bleached softwood kraft (NBSK) pulp with a capacity of 535,000 tons/year.

Paper Excellence had sold NBSK from the mill in China as demand and prices for softwood pulp increased due to rising futures prices on the Shanghai Futures Exchange. The company noted that while market conditions allow for the resumption of pulp production, the curtailment of paper production operations at Crofton will be extended until the end of October. The facility operates a 130,000 tons/year printing paper machine, integrated with a pulp production line.

7.    Metsä Group Commences Construction of Kemi Pulp Mill with 1.5 Million Tons/Year Capacity in Finland, Expected to Deliver to China Next Month

Metsä Group has initiated a new pulp and bioproduct mill in Kemi, Finland, with a capacity of approximately 1.5 million tons per year of various wood pulp and bioproducts. A significant portion of the northern bleached softwood kraft (NBSK) pulp production from this mill is expected to be exported to China starting next month. Metsä Group is a regular NBSK supplier to China and has entered into long-term contracts there, primarily with end-users.

In addition to the new pulp production activities, the 67 million Euros (72 million USD) investment also includes an expansion of the paper mill at the same location, which is currently producing 425,000 tons of uncoated white-top kraftliner, both coated and uncoated. The expansion will increase the mill's capacity to produce an additional 40,000 tons per year of uncoated white-top kraftliner.

Source: CRM Technology Complited