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Commodities

Japanese cardboard scrap prices rebound on Chinese demand

Wholesalers remain below peak prices after Beijing's pollution crackdown

TOKYO -- Export prices of Japanese waste paperboard have jumped 10% from November as prospects for greater Chinese demand outweigh the effects of Beijing's environmental crackdown.

December shipments of recycled cardboard fetch 22.5 yen (20 cents) per kilogram, according to a quote from an association of wastepaper wholesalers in the Kanto region around Tokyo. Last month's shipments fetched an average of 20.5 yen, 26% below the peak for July's deliveries. The wholesalers cooperative, known as Kanto Shoso, held off on September and October wastepaper shipments due to the drop in Chinese demand.

China tightened environmental oversight prior to the Communist Party congress in October. That campaign also affected domestic paper mills, with those failing to meet emissions and sewage standards apparently ordered to restrict imports of raw materials. Some operations were halted entirely.

Yet China's booming domestic e-commerce industry appears likely to lift demand for cardboard. Though demand tied to online retail packaging lost steam this month following Singles Day on Nov. 11 -- China's answer to the Black Friday shopping event -- a wholesaler said Chinese paper manufacturers looking to widen their share have been actively purchasing wastepaper.

Export prices may benefit further if Beijing accommodates domestic demand for wastepaper and lift restrictions on imports next year.

(Nikkei)

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