China’s paper and board exports continue facing headwinds causing export volumes to fall
China's paper and board sector has faced persistent weakness in recent months, with trade war pressures continuing to weigh on performance. While some economic indicators showed mixed signals, the overall trend pointed to mounting challenges for the industry. Exports to the United States suffered particularly steep declines, falling by approximately 22.5% as trade tensions persisted. This drop occurred despite modest growth in China's overall exports, which increased by 8.1% thanks to stronger shipments to Southeast Asia and European markets.
| Index | April | May |
| New Export Orders (%) | 44.7 | 47.5 |
| Production Index (%) | 49.8 | 50.7 |
| Finished Goods Inventory (%) | 47.3 | 46.5 |
| Producer Prices (%) | 44.8 | 44.7 |
The export situation showed further deterioration in May, with China's total exports growing just 4.8% year-on-year to $316.1 billion - falling slightly below market expectations and marking the slowest growth rate in three months. The U.S. market proved especially difficult, with exports plunging 34.5% amid renewed Trump-era tariffs and ongoing uncertainty in trade negotiations between Washington and Beijing. This represented the sharpest decline in over five years for Chinese exports to America. Other markets showed more positive trends, including growth to Japan (6.2%), Taiwan (7.5%), Australia (12.6%), the EU (12.0%), and ASEAN countries (14.8%), while exports to South Korea declined modestly by 1.2%.
Read More About Paper Board Production Cost Reports - Get Free Sample Copy in PDF
Within the paper industry, export orders remained firmly in contraction territory throughout April and May, though there was slight improvement from April's 44.7 reading to May's 47.5. This persistent weakness reflected broader challenges facing export-oriented businesses, even as domestic consumption showed some resilience through steady retail sales and strong holiday spending during the May Day period. The paper and board sector felt these pressures acutely, experiencing a more pronounced seasonal slowdown than usual during April.
Printing and writing paper segments were especially hard hit, with prices declining for both coated and uncoated woodfree grades. Coated woodfree paper faced particularly sluggish demand as commercial printing activity remained subdued and buyers adopted a cautious approach amid ongoing trade uncertainties. The situation was exacerbated by production increases from recently restarted machines, which worsened existing oversupply problems. At the same time, falling pulp prices eliminated what little cost support had been propping up paper prices. Uncoated woodfree paper followed a similar trajectory, with producers implementing price cuts and offering steeper discounts to compete in an increasingly challenging market environment.
Containerboard markets continued to struggle as well, though the pace of price declines moderated somewhat compared to March's steep drops. Some mills attempted to implement modest price increases following the Qingming holiday, but these efforts proved unsustainable as demand failed to materialize. The persistent oversupply situation grew even more acute as new production capacity continued to come online. Compounding these challenges, rising domestic OCC costs put additional pressure on mill margins, prompting several producers to schedule maintenance shutdowns in early May. These factors combined to create exceptionally difficult operating conditions across all segments of China's paper and board industry, with weak demand, excess capacity, and trade-related uncertainties all contributing to the sector's struggles.
