Tare cardboard capacities threatens to drop in prices
By the end of the first half of the year, a surplus was formed in Russia in the sector of targeted cardboard. Due to the reduction in consumption both in the national market and in export areas against the background of stagnation in the economy and trade conflicts, the companies are forced to form warehouses. In these conditions, market participants are preparing to reduce prices, which can reach 10%.
The reduction in demand from consumers of targeted cardboard and corrugated rosemans threatens to drop in prices for these products and a stop of part of the capacities, several participants in the pulp and paper market told Kommersant. According to them, in the Russian Federation there was a surplus of target cardboard capacities in connection with the launch of several large waste paper processing and increasing the volume of its use. If even 15 years ago 10% of cardboard boxes were processed, now the indicator is approaching 70%, says the source of Kommersant. With the growth of the release of tarry waste cardboard, which is initially cheaper, he explains, competition with pulp products began to intensify in the domestic market. Before, according to Kommersant sources, Primary raw materials manufacturers could export the goods, but this year deliveries became unprofitable under the rise in the cost of logistics and strengthening the ruble.
In addition, the demand from China, which, after the sanctions of European countries closed, was a key area of export of target cardboard, began to decline against the backdrop of trade conflicts with the United States and other countries that have introduced measures to protect their markets from Chinese goods. As a result, Beijing reduced the flow of goods from the country and, accordingly, the need for packaging decreased. “Cardboard prices in China were low before, and now importers either require significant discounts, or generally refuse procurement. And more such large volumes of their products to Russian suppliers have nowhere to reorient especially, ”says one of Kommersant’s interlocutors.
According to Kommersant’s interlocutors, as a result of the warehouses of companies, they began to clog with unclaimed goods and, in order to prevent production stops, market participants are ready to offer discounts. In June, a testleiner (Tarny cardboard using waste paper) can cheaper 5 thousand rubles. For a ton, they told Kommersant in the market. According to the index of the Center for System Solutions (CSR), which publishes the layout league, on May 25, the testlayer cost 49.3 thousand rubles. per ton. Thus, prices can decrease by more than 10%.
The Kommersant source in one of the sector companies confirmed that in June it is planned to reduce prices by about 5 thousand rubles. But, he says, « the situation is not a collapse. » The interlocutor “Kommersant” doubts that China has the greatest influence on the situation, and believes that the fall of demand for cardboard is associated with stagnation of the Russian economy. According to him, the prices could support the prices of part of the production, but none of the companies are ready for this, and in the future, prices may continue to decline due to the dumping of some players.
The Ilim group, which at the end of 2024 launched large production of targeted cardboard in Ust-Ilimsk, said that price volatility is characteristic of the industry. On leaps, they are listed in the company, including the introduction of new capacities, shocks in logistics, changes in geopolitics, and dynamics of currency courses. “The injection of the situation around tariffs is also reflected in prices. However, such fluctuations are the norm for the industry, large players are accustomed to adapt to changing market conditions, ”they note there. The company emphasizes that Ice as the largest Russian exporter of the Central Bank’s products continues to ship to China and is not going to adjust plans.
The chairman of the board of directors of the GOTEK group Vladimir Chuikov also notes that this is not the first cycle when the balance of production and consumption is violated. “The market of the target cardboard is quite large – about 5 million tons, but its specificity is dependence on the packaging segment. Therefore, in conditions of limiting export capabilities, any small surplus leads to a lowering trend, ”he says. According to Mr. Chuikov, as soon as the demand for the markets that consume packaging will grow, the balance will be restored, and after it the cost of cardboard.
