The Zhitong Finance App learned that Zhishang Securities released a research report saying that the price increase of box board paper exceeded expectations during the 26 off-season, for the first time since '22. The bank believes it is mainly driven by marginal improvements in supply and demand for box board paper combined with rising energy costs, and is looking forward to the peak season performance from July to November. The industry is facing a double inflection point of “contraction in supply” and “cost push up”. While the supply and demand pattern is improving, the continued rise in overseas US waste and energy costs will force the price of imported paper to rise. Thus, driven by both cost and supply and demand, the rise in domestic paper prices is highly sustainable.
The main views of Zheshang Securities are as follows:
Since May, the off-season rise in cardboard has exceeded expectations
The price increase of boxboard paper exceeded expectations during the 26 off-season, the first time in 22 years. The cumulative price increase of box board paper and corrugated paper from February to July '26 reached 300 yuan+. The bank believes that this round of price increases is mainly driven by marginal improvements in supply and demand for boxboard paper combined with rising energy costs. It is looking forward to the July-November peak season performance.
The industry is facing a double inflection point of “contraction in supply” and “rising costs”
The operating rate of the industry increased marginally. From the supply side, domestic production capacity expansion is coming to an end and there is no follow-up plan. Combined with US waste and high energy costs, import profits are under pressure, import volume has declined, and export channels have improved markedly. This has made supply contraction extremely sustainable; from the demand side, although there is no explosive growth, the overall trend is moderate recovery and marginal improvement. While the supply and demand pattern is improving, the continued rise in overseas US waste and energy costs will force the price of imported paper to rise. As a result, the rise in domestic paper prices is highly sustainable, driven by both cost and supply and demand.
Market share situation of box board and corrugated paper
Box board paper: There are slight resource barriers, and the CR5 industry is showing an upward trend. The market share of CR5 in the industry will reach 69% in 2025. Among them, Nine Dragons had a market share of 27.5%, Mountain Hawk 14.1%, Liwen 13.9%, Sun 9.0%, and Rongcheng 4.4%.
Corrugated paper: Resource barriers are low, and the share of CR4 in the industry is on a downward trend. In 2025, CR4 in the industry will account for 22.6%. Among them, Nine Dragons had the highest market share of 14.3%, Mountain Hawk 3.3%, Rongcheng 3.0%, and Liwen 2.1%.
Sorting out the production capacity of core companies
(1) Nine Dragons: 13.43 million tons of boxboard paper, 3.7 million tons of corrugated paper, 7.49 million tons of pulp; (2) Sun: 4.4 million tons of boxboard paper, 5.35 million tons of pulp; (3) Liwen: 6.78 million tons of boxboard paper, 800,000 tons of corrugated paper, 950,000 tons of pulp; (4) Wuzhou: 980,000 tons of corrugated paper, 300,000 tons of pulp; (5) Lin Ping: 1.1 million tons of corrugated paper, 350,000 tons of corrugated paper.
Risk Alerts
1. Fluctuating raw material prices; 2. Production capacity investment is too concentrated; 3. Downstream demand falls short of expectations; 4. The competitive pattern deteriorates.