Middle East: Containerboard prices up slightly in the GCC region in September 

Learn about the factors influencing Middle Eastern containerboard price movements, including shifting demand and a changing regulatory landscape

Prices for recycled fiber-based containerboard edged up in in the Gulf Cooperation Council (GCC) countries in September. Most of the price reports we received for locally produced testliner and fluting were stable or showed very slight increases from the previous month, but a few declines were also in the mix.  

As a result, our PIX Testliner GCC index rose by 2.46 dollars, or by 0.52%, and settled at 478.87 USD/t. PIX Fluting GCC inched north by 1.53 dollars, or by 0.34%, closing at 453.87 USD/t. 

The UAE sees upswing in demand after summer lull

Containerboard demand was usually described as healthy, by some as very healthy, in the region’s largest market Saudi Arabia in September. In the United Arab Emirates (UAE), demand has picked up after the summer slowdown in July and August. However, some UAE-based sources said they had expected a more solid September upswing.  

Purchasing Managers’ Indices (PMIs) in the non-oil private sector have hovered around 54.4-55.0 in Saudi Arabia and 53.7-54.6 in the UAE in June-August, down from approximately 57.0 for both in February-March. September data is not yet available. 

Costs for old corrugated containers (OCC) have remained at a high level in the region, contacts said, most of them reporting only small price fluctuations in September.  

As for international freight rates, several sources reported noticing a decline. This is backed up by Drewry’s World Container Index, which has dropped by 38% from its most recent peak in mid-July to $3,691 per 40ft container last week. 

Anti-dumping duties expire 

The GCC-wide anti-dumping duties (ADDs) on testliner and fluting originating from Spain and Poland, which went into force on May 1, 2019, have expired after their intended five years. The percentages applied during the period were 24.6% for Spain’s Saica, 31% for other Spanish companies and 34% for Polish firms.  

Contacts said they had not seen any upswing in imports from these two countries since May, which was confirmed by Eurostat data covering May-July.  

Several sources said there had been no application for the ADDs to be extended. “I believe the message was sent clearly. We don’t anticipate that the same suppliers from the same countries would disrespect our markets again. Ours is an open market for fair competition, not for dumping,” an industry contact remarked.

EU exports down to the UAE, up to Saudi Arabia

Total EU exports of testliner and fluting to the UEA have dropped by about 40% year-on-year in January-July, according to Eurostat data. Some corrugators in the UAE said they have been seeing offers for European testliner and fluting but described the prices as uninteresting.  

Testliner and fluting exports from the EU to Saudi Arabia, on the other hand, have risen by some 60% compared to January-July 2023.  

Healthy demand expected in Q4

Looking ahead, contacts expected containerboard demand to be strong in the GCC region in October, November and the first part of December. The latter part of December usually sees a bit of a downturn, as companies optimize their stocks before the end of the year. However, Ramadan starting approximately 10 days earlier next year may limit this slowdown, a few sources speculated. 

As for prices, there was an expectation that producers would try to increase them again for October or the fourth quarter, though the result of this remains to be seen. 

PIX indices covering the two main recycled fiber-based containerboard grades, produced in and delivered to the GCC, were launched in June 2023. The GCC countries include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. 

If you want to learn more about market trends and price movements, Fastmarkets provide a range of market intelligence, including short-term forecastsprice data and market coverage to keep you one step ahead of the market. Speak to our team and find out more today.

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