Paper price hikes hit carton sector

Updated 2017-10-31 10:31:56 Global Times

As domestic paper prices surge amid a shortage of raw materials, makers of paper products - cartons in particular - are grappling with higher costs.

Among 85 domestic paper manufacturers, 71 hiked their purchase prices by 50 yuan (.52) to 300 yuan per ton, as shown in their bids for waste paper from September 8 to 10, according to paper industry website chinapaper.net.

For example, Xuzhou Ronghang Paper Industry Co, based in East China's Jiangsu Province, said Wednesday it will hike the price of its high-strength corrugated paper cartons by 300 yuan per ton.

A similar hike was announced Thursday by Baoding Sanlian Paper Industry Co, based in North China's Hebei Province.

Domestic paper prices have been on the rise since November 2016, and the pace of increases is accelerating ahead of the Singles' Day shopping festival on November 11. That sales event will mean more than 1 billion deliveries, according to a forecast issued during a logistics mobilization meeting in September.

Compared with plastic shipping bags, cartons protect items better, which means e-commerce platforms favor boxes. The fact has had a direct effect on their costs, an industry insider who declined to be named told the Global Times Monday.

Higher box prices are affecting e-commerce enterprises and individual traders, which mainly focus on such items as cosmetics, home appliances, toys or other consumer goods that need to be shipped in cartons.

Lily Wu, a jewelry designer and seller based in Shanghai, told the Global Times on Monday that she buys all her shipping materials on taobao.com, and her products are mainly sold via her shop on WeChat.

"I usually buy small boxes for packing items like necklaces or earrings. They used to cost 0.29 yuan but now cost 0.44 yuan," she said, adding the slight increase just accounts for a tiny proportion of the commodity's price, so it won't have much impact.

However, things are different for other carton-reliant shop owners who need to send out large numbers of parcels each day or each month.

The owner of a children's toy shop on taobao.com told the Global Times on Monday that the price of an ordinary carton has increased by 0.3 yuan, so he has to spend another 2,400 yuan a month, based on orders of about 8,000 items.

"If carton prices keep going up, we may have to raise our selling prices. At the moment, we're absorbing this extra cost," said the shop owner who declined to give his name.

"Price fluctuations are normal market movements," Zhao Wei, chairman of the China Paper Association, told the Global Times on Monday.

"Relevant departments have conducted investigations in several paper making companies, checking the warehouses and details such as overall profit," Zhao continued. "The investigation found there is no monopoly in paper production at present.

"As China has strengthened the management of imported waste paper, which is one of the main sources of raw materials for papermaking, the import volume has fallen and prices have risen sharply," Zhao pointed out. "Some other factors are also at work, such as energy prices and transportation conditions."

Zhao also expressed concern about supplies. "The overall sum of exports is more than imports, and paper is the packaging product. Raw material might be tight for a while." Zhao urged various government departments to cooperate to find a solution.

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