PIX Packaging GCC indices continue to decline in December

Gulf Cooperation Council (GCC) region prices for recycled fiber-based containerboard (RCCM) experienced minor changes in December with locally produced testliner and fluting stable or slightly lower compared with November, sources told Fastmarkets.

Fastmarkets’ PIX Testliner GCC index edged down by $3.01 per tonne, or 0.63%, to close at $476.80 per tonne and the PIX Fluting GCC index fell by $1.03 per tonne, or 0.23%, to $454.56 per tonne. Both indices were down for the second consecutive month.

Containerboard demand in both the United Arab Emirates (UAE) and Saudi Arabia was said to be more or less the same or slightly slower than in November.

“December [was a] little bit slow, because people [adjust their stocks leading to] slightly less demand at the end of the year,” one source told Fastmarkets.

In the UAE, containerboard market participants said that recovered paper (RCP) prices initially dropped in December, before quickly starting to pick up. And while the reason behind the change was unclear, one source said that local issues in India might be behind it.

In Saudi Arabia, meanwhile, sources said RCP prices went down in December.

In terms of international freight rates, sources said prices were still elevated in December, albeit not as high as July’s record-high and this was further confirmed by Drewry’s World Container Index, which increased by 14% from a small trough on November 28 to $3,905 per 40-feet container on January 2.

Energy company, Saudi Aramco, increased diesel prices in Saudi Arabia to 1.66 riyals ($0.44) per liter, up by 0.51 riyals, or 44.3%, from 1.15 riyals per liter, effective from January 1, 2025. Aramco’s previous increase was in January 2024, when it increased by 53% to 1.15 riyals.

Producers had been expecting to raise containerboard prices in January, based on an expectation that Ramadan, which will start at the end of February, will boost demand in early 2025, but some sources said the expected supply/demand balance had been thrown off and that would make attempts to increase prices more difficult to realize.

One factor, market participants told Fastmarkets, was the recent and planned increases to containerboard production capacity in the region – in summer 2024, the Red Sea Company started up with a reported capacity of 6,000-7,000 tonnes per month and, later this year, at least two more mills are scheduled to start production.

The post PIX Packaging GCC indices continue to decline in December appeared first on Fastmarkets.