Over the past two to three years, China has announced tens of million tons of new containerboard capacity which makes people wonder: as a regional containerboard producer, can China really consume all this new capacity? Is this a signal of overcapacity? How will the future containerboard price behave?
Since late 2016, paper prices in China have experienced significant growth, making most paper producers, especially containerboard producers, extremely profitable. Prices grew because of the confluence of three factors: inventories had trended down, investment in new capacity had been low, and demand grew. These made the supply-demand balance tight. We see the result in the spate of new capacity announced for 2018.
Through the Chinese government’s “one belt one road initiative”, there is a golden opportunity for equipment suppliers, trading partners, as well as financial institutions to work together and create this new business model.
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