As the Chinese Lunar New Year, also known as the Spring Festival, celebrating the year of the dog approaches, paper and board mills across China are set to temporarily close or curtail paper production. The New Year falls on February 16th this year, while the festival will last until March 2nd, or about two weeks.
All the downtime announced between now and the Chinese New Year definitely explains the lack of urgency regarding recovered paper (RCP), or scrap paper, pricing. Recycled paper suppliers should be aware that Nine Dragons Paper, Lee & Man Paper Manufacturing, Shanying International Holdings, and Dongguan Jianhui Paper, along with its sister companies, all plan to stop production lines or shutdown machines for repair around the Chinese holiday.
Overall, the market supply will be cut by about 544,000 tonnes until mill workers return to the line after the two-week festival.
For the most part, recycled containerboard, better known as cardboard, will be heavily affected by the production disruptions – a bit of an inconvenience seeing as the US holiday season has many recyclable handlers flush with cardboard shipping boxes. Other paper and board grades affected will include cartonboard, uncoated printing and writing paper, and newsprint.
Here’s a breakdown of the paper and board production disruptions per Chinese producer:
- Nine Dragons Paper Holdings. Nine Dragons announced it will be repairing two of its paper machines at its Quanzhou mill in Fujian province for 18 days starting February 26th. The shutdown will reduce output by about 34,000 tonnes. The company also shut down lines at its mill in Dongguan city last year and plans to halt production at its Taicang mill around the Lunar New Year.
- Lee & Man Paper Manufacturing. Lee & Man will be halting production at four factory sites, resulting in a loss of about 184,000 tonnes of board production. The timelines for the production halts are as follows: January 10th through February 25th at their mill in Dongguan city; 15 days beginning mid-February at their Changshu and Chongqing mill; and half a month starting January 13th at their Jiujiang mill, as well as another 2 weeks of downtown beginning February 10th.
- Shanying International Holdings. Starting in February, Shanying will shut down three of its paper and board units in Maanshan city for about five to seven days. Overall, the company expects to lose an estimated 14,000 tonnes of production. Shanying’s subsidiary, Jian Paper, will also turn off four units for five to eight days between January 21st and February 10th, resulting in 30,000 tonnes lost.
- Dongguan Jianhui Paper. Dongguan’s output will be slashed by about 29,000 tonnes, as lines in their only mill located in Guangdong province will be offline for about two weeks starting in February. Dongguan Jinzhou Paper and Dongguan Yinzhou Paper, their sister companies, will cut off all machines, which have a combined capacity of 1.6 million tonnes per year, for ten days beginning February 12th.
If the Chinese New Year has your scrap paper stock piling up, please contact Berg Mill Supply. For over 50 years, our industry veterans have been working hard to secure an international network of suppliers and buyers, ensuring disruptions to revenues are kept to a minimum in times of global market fluctuations.