The Chinese pulp market has seen a continuous upward trend in prices, driving up the prices of downstream packaging paper such as color boxes and cartons, further transmitting cost pressures to end users. Industry insiders point out that with the combined effects of supply contraction, low inventory, and peak season demand, pulp prices may remain high in the short term, squeezing the profit margins of packaging companies.
Third Round of Pulp Price Increases, Nearly 6% in a Month
Since December, leading domestic paper companies have successively issued their third round of price increase notices this month, with corrugated paper, linerboard, and grey-backed white board paper generally increasing by 100-150 yuan/ton, a cumulative increase of nearly 6% in a month. This price increase is mainly driven by upstream pulp costs. According to data from Zhuochuang Information, from late November to the present, the spot price of softwood pulp in Shandong has risen from 6,300 yuan/ton to 6,550 yuan/ton, and the price of hardwood pulp has also risen from 4,050 yuan/ton to 4,200 yuan/ton, representing increases of 4% and 3.7% respectively.
Global Inventory Reduction
The continued reduction in global supply chain inventory has been a key driver behind the recent surge in pulp prices. Data shows that by the end of November, pulp inventory at major Chinese ports had fallen below 2 million tons, a 3% decrease month-on-month, marking the fourth consecutive month of decline. Pulp inventory at European ports also declined by 12% month-on-month to 1.21 million tons, a near two-year low. On the supply side, new global commodity pulp production capacity for 2025 was concentrated in the first three quarters, with no large-scale projects expected to come online before 2026, creating a supply "gap" in the market and supporting pulp prices.
Early Peak Demand Season, Concentrated Packaging Orders
Despite being the traditional off-season, downstream packaging demand has been strong. Driven by early stockpiling for New Year's Day and the Spring Festival, industries such as e-commerce, food and beverage, and daily chemicals have seen a concentrated release of demand for color boxes and cartons. Leading paper mills have seen their operating rates rise to over 70%, with some plants already scheduled for production until mid-January 2026. Starting in November, customers began locking in prices and quantities, with order volume increasing by approximately 15% compared to the same period last year.
Lower Costs Pressure Packaging Companies' Profits
Faced with continuously rising raw material prices, midstream and downstream packaging companies are under significant pressure. The head of a color printing factory in Foshan, Guangdong, stated that the current price of gray-backed white cardboard (0.5 yuan/square meter) has increased by 0.06 yuan since early November. Based on a monthly usage of 5 million square meters, this translates to an increase in costs of nearly 300,000 yuan. "However, end customers are only accepting phased cost increases, significantly squeezing company profits." To cope with cost pressures, some companies are accelerating the procurement of alternative raw materials, increasing the use of recycled fibers and bamboo pulp, while negotiating floating price mechanisms with downstream customers to alleviate the pressure from one side.
Due to rising raw material costs, customers with existing orders are hoping to place them as soon as possible.