Page 45 from: June / July 2013

45June/July 2013

Paper

decreases at home for woodfree deink-
ing grades such as white ledger, SOP
and coated book whereas export pric-
ing appears to be holding for the
moment. Domestically, pulp substitutes
are also continuing to hold.

According to Nine Dragons Paper, the
biggest containerboard product pro-
ducer in Asia and one of the largest
in the world, it is to press ahead with
capacity increases despite the current
global economic slowdown. Six new
lines will enter production over the
next three years, including five in
China and one in Vietnam. ‘Along
with active expansion of overseas
markets, such a move is estimated to
add more than 2 million tonnes to its
production capacity,’ the group
states.
According to chairlady and founder
Cheung Yan, supply and demand for
packaging paperboard products will
gradually increase given ‘favourable
prospects after 2015’. For Nine Drag-

ons, the new lines ‘will further
strengthen its regional scale, diversi-
fying its product portfolio in order to
exploit its economies of scale’. And
she adds: ‘The positive effects
brought by global economic recovery
have begun to emerge. We will
endeavour to carry forward a vigor-
ous capital expenditure plan allowing
us to consolidate and expand our
leading position in the market in the
next three years.’
Two packaging paperboard produc-
tion lines with a total annual capac-
ity of 650 000 tonnes are scheduled
for imminent start-up at Fujian Quan-
zhou, according to Nine Dragons.
Another line with a yearly capacity of
300 000 tonnes will commence pro-

duction at Sichuan Leshan before
December.
Among its other plans, the group is
proposing to build a packaging paper-
board production line in Vietnam with

an annual capacity of 350 000 tonnes.
This will come on stream before the
end of 2016 and will entail a total
investment of approximately US$ 180
million.

Comparing January-March 2013 with
the same period last year, US exports of
recovered paper fell 7% in volume
terms to 5.45 million short tons, Census
Bureau figures reveal. Shipments to
China slid 9% year on year to around

Nine Dragons unveils six-line expansion plan

3.8 million short tons, with resulting
revenues dropping 15% to US$ 512
million. The value of US exports to all
destinations declined 11% year on year
to US$ 823 million in the first quarter
of 2013, with the total including India
on US$ 70 million (-9%), Mexico on
US$ 59 million (-2.5%) and South
Korea on US$ 49 million (+15%).

Asia
Urgent requirement
Demand dropped in May for both the
brown and middle grades of recovered
fibre, with OCC prices duly falling
US$ 20-25 per tonne. Most exporters
had thought that prices would remain
low because no exports were heading
to Indonesia in June – but the opposite
happened. Having not bought for a
long time, some Chinese mills had an
urgent requirement for fibre and were
willing to increase their prices; how-
ever, the quality needed to be very
good owing to the country’s strict
import controls.
Packers in Europe are now choosing to
sort more closely than before and are
slowly selling into China once again.
However, this continues to be a tricky
business as entire loads can be rejected

if customs officials find some prohibi-
tive material – even when 99% of the
content is of good quality.
Demand from India is considered to be
weak. Also, the fact that the Indian
rupee is losing value in relation to the
US dollar constitutes an ominous sign
for the months ahead.
For the fourth consecutive month,
freight rates have been heading lower.
Container availability is good but there
is quite simply not much to export.
The holiday season starts at the end of
June and collection volumes will
decline even further. So will this have
an effect on the market? Many mills in
Asia and Europe are not performing
well at present and demand is expect-
ed to be weak; unlike in previous years,
therefore, a huge price increase is not
anticipated.

Contributing to the
Recovered Paper Market
Analysis:
• Melvin de Groot (Van Gelder

Recycling, the Netherlands)
• Mariëlle Gommans

(Bel Fibres, Belgium)
• Steve Vento (Vipa Lausanne

SA, Switzerland)

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