Middle East: PIX Packaging GCC indices show first slight dip in a year

Prices for recycled fiber-based containerboard (RCCM) experienced minor changes in November from last month in the Gulf Cooperation Council (GCC) countries. Most of the price reports we received for locally produced testliner and fluting were stable or showed very small increases or decreases compared to the previous month.

Fastmarkets’ PIX Testliner GCC index inched down by $1.27 per tonne, or by 0.26%, to $479.81 per tonne. PIX Fluting GCC decreased by $1.13 per tonne, or by 0.25%, to $455.59 per tonne. Prices have been rising over the past year, up by $76-77 per tonne. This is the first time the indices have decreased since November 2023.

OCC prices show signs of declines, freight costs slip

Several containerboard producers reported decreases in prices for old corrugated containers (OCC). However, other sources said they had not yet seen a price change.

Several sources have also reported a slow decline in international freight rates in November. This was further confirmed by Drewry’s World Container Index, which has fallen by 3% since November 7 to $3,331 per 40-feet container by the end of last week.

Sources in United Arab Emirates (UAE) and Saudi Arabia said containerboard demand was more or less stable, with small variations between the two countries. In Saudi Arabia, demand has been steady at a healthy level compared with the summer, according to sources. The UAE market, which had experienced a summer slowdown, has seen demand improve. However, many still considered demand in the GCC to be more stable than positive, especially because the end of the year is described as a slower season.

Many companies have started optimizing their inventory levels to maintain lower stock before the end of the year, which is typical in the industry. This can be considered a decrease in demand by the market entering December.

Main competition between the GCC mills

Indian producers continue to ship to the UAE, however quality issues and uncompetitive prices have made them less competitive compared with mills in the region, sources said. Overall, sources generally said that the main competition is between domestic mills.

One buyer said: “[Given] the landing cost here, [Indian prices are] almost the same as local prices. It’s not feasible right now.”

Looking ahead, sources expect demand to rise in the first quarter of 2025, when businesses are busy preparing for Ramadan. Producers said that they are likely to try to increase their prices then, anticipating that improved demand will support potential price adjustments.

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.

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