Aug. 14, 2023
Demand is weak, both volume and price are falling, and the carton market on both sides of the strait is almost the same.
According to Taiwan media reports, due to the unfavorable impact of the export situation on the island and Vietnam, Taiwan’s industrial paper cartons “shrunk in volume and fell in price” in the first half of the year. It is roughly estimated that the price of Taiwan’s cartons in the first half of the year dropped by nearly 10% year-on-year, and the price of Vietnam’s export cartons fell by more than 15%. However, with the arrival of the traditional peak season in the second half of the year, a large amount of carton demand will be released, which is expected to ease the bidding war.
1. Export sales are unfavorable. In the first half of the year, industrial paper cartons "shrunk in volume and dropped in price"
According to statistics from the Taiwan Paper Association, in the first four months of this year, Taiwan's total paper production was 1.3 million tons, a year-on-year decrease of 7.7%, and cardboard production was 1.055 million tons, an annual decrease of 9.2%. Paper mills revealed that they will export excess raw paper to factories in mainland China. Starting this year, imports of industrial paper in mainland China will be reduced to zero tariffs. Taiwan raw paper has a cost advantage, which will help Zengyu to make profits.
The industry admitted frankly that the export market conditions in Taiwan, Vietnam, and the mainland are really bad. Inventories in Europe and the United States have yet to be digested, and inflation has raised interest rates to tighten consumption. Export orders have not yet seen the dawn, and the bidding war continues. In Taiwan, as of June, the sales of cartons are estimated to have decreased by more than 10%. Fortunately, domestic sales have remained normal. The price of cartons in the first half of this year was about 14,500 yuan per ton, an annual decrease of about 10%.
However, Vietnam is more focused on foreign trade. In July, exports fell for the fifth consecutive month, the longest consecutive decline in 14 years. The sluggish export sales also affected domestic demand. The industry in Taiwan revealed that the price of cartons in Vietnam fell by more than 15% in the first half of the year, from about US$450 in the first half of last year to US$380 in the first half of this year.
2. It is expected that the demand for cartons will increase in the second half of the year, and the bidding war is expected to ease
It is reported in the market that at present, the focus of price competition among the three major industrial and paper companies is mainly in large-volume customers and fierce bidding in the central region; downstream third-tier paper manufacturers that rely on cartons for their livelihoods are sticking to the terminal price in the consumer market.
Although the prospect of export sales is unclear, many paper manufacturers said that Taiwan's domestic market is gradually recovering, and it will get better in the second half of the year. In addition, many paper mills also believe that Taiwan's paper market will only get better and never get worse. The third quarter has entered the peak season of agricultural and fruit production and sales, and driven by festivals such as the Chinese New Year and Mid-Autumn Festival, the demand for cartons is expected to increase.
(RX packaging organizes stories for you)
