Heading into 2025, the paper and board markets in China remained relatively healthy from a demand perspective, mostly due to the subsidies on home appliances, purchases in advance of the Chinese New Year holiday and strong exports — in part with an added push from stockpiling in the US in advance of any tariffs.
Woodfree paper demand was also helped by final deliveries for school-supply orders. Still, oversupply could have dominated the market but for Shandong Chenming’s ongoing idling of its capacity, which altered the market balance. Shandong Chenming has about 2 million tonnes of ivory board capacity and 4 million tonnes of printing & writing paper capacity.
The supply tightening and stable-to-improving demand drove the price increases for boxboard and woodfree grades in December. For recycled containerboard, prices also rose helped by solid demand and low producer inventories.
Looking ahead, this forecast shows regional real GDP growth at 4.8% in 2024, 4.4% in 2025 and 4.1% in 2026. Regional real GDP growth, measured at purchasing power parity exchange rates, is expected to average 4.2% over the next five years through 2029 and 3.9% over the entire 15-year forecast period through 2039.
We expect the Chinese economy to continue its transition after the rebound growth seen in 2023, leading to decelerating growth in the coming years.
It is important to remember that while China might be growing significantly more slowly than it has in past years, it is still growing — and doing so at a much faster rate than any other large economy — so it accounts for a major portion of global economic growth.
Unlike the other two economies of similar size, the US and Europe, the Chinese economy continued to expand during the pandemic year of 2020, although its pace of growth was much lower than under normal circumstances.
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Containerboard demand growth set to accelerate in 2025
We estimate that Asian demand for containerboard rose 2.2% in 2024, a bit slower than the 3.3% pace in 2023.
Economic sluggishness in China due to headwinds from the struggling property market and cautious consumers drove the slower growth. We project growth of 3.9% in 2025 and 4.3% in 2026, assuming an improving economic picture that will support trade, consumption and packaging use.
Chinese estimated demand growth slowed to 1.6% in 2024. This slower growth was caused by weak consumer spending as consumers remained cautious due to sluggish income growth and the negative wealth effect caused by declines in property prices. Healthy goods exports supported demand.
We expect growth will accelerate to 3.6% in 2025 and 4.2% in 2026 after the Chinese economy sees more support from the consumer as spending improves with the government implementing further stimulus policies to renew consumer confidence. This outcome assumes no major trade war, but goods exports will nevertheless not be as strong as in 2024.
Packaging operating rates will remain subdue in 2025
Capacity in Asia rose at an average rate of 6.1% per year in 2020-23 — a rapid increase, especially compared with the growth in demand of just 2.5% per year during that period. These increases occurred both in China and the rest of Asia and assume some closures in China.
Asian average operating rates slipped to 73% in 2023 and 71% in 2024. We expect rates to remain down at 71% in 2025 before they gradually edge back up to 73% in 2026.
Chinese operating rates are extremely low, estimated at just 65% in 2024 with assumed closures and 61% without closures. We forecast that rates in China will remain at low levels over the next two years while capacity increases continue.
Fluctuating recycled containerboard prices ahead
Ongoing demand, sluggishness and plentiful supply drove recycled containerboard prices lower in the first half of 2024. Prices continued to decline in April-May before largely stabilizing in June. Further minor reductions continued in the third quarter before the seasonal upturn in demand and well-controlled inventories prompted increases in November-December.
We predict that recycled containerboard prices will slide modestly in the first quarter of 2025 as demand fades and supplies remain ample. We then forecast a modest upturn in the second quarter and second half of the year, driven by rising cost pressures and some improvement in demand conditions.
On an annual basis, prices fell 7-9% in 2024 but are expected to rise 2-3% in 2025 for testliner and corrugating medium, while kraft-top liner prices slip slightly further.
Kraftliner prices are predicted to remain unchanged in the first half of 2025 as market conditions remain lackluster. We project some recovery in prices in the second half of the year, assuming some recovery in demand and a limited trade war. Annualized prices rose 1% in 2024 and will increase 4% in 2025.
Asian boxboard demand will grow in all major markets
Total demand for boxboard will rise 3.3% in 2025 and 2.9% in 2026.
Chinese demand will register a pick-up of 3% in 2025 and 2.6% in 2026, supported by increased usage of food takeaway containers and express packages as well as the initiation of some efforts toward more sustainable packaging.
There is the possibility of faster progress in this paper-for-plastic replacement plan in the coming years. The country’s policies to support the real estate market, cuts to the reserve requirement ratio (RRR) and the new opening of the Pudong District will help guarantee China’s economy recovers, albeit slowly.
We predict Indian demand will grow 6.0% in 2025 and 4.8% in 2026, supported by continued investment from both domestic and overseas sources.
Want more insights? Access our data story to see the visualizations behind our projections and understand how market movements will impact pricing.
