As the first quarter of 2026 draws to a close, the global paper industry stands at a critical juncture marked by raw material volatility, differentiated demand dynamics, and accelerated green transformation. This quarter, paper mills worldwide have navigated through cost pressures and supply chain adjustments, while international paper trade has witnessed subtle shifts driven by regional demand variations and geopolitical factors. Below is a comprehensive analysis of the core trends shaping the global paper industry, mills, and trade in Q1 2026.

The first quarter of 2026 saw continued high volatility in the global pulp market, primarily driven by supply disruptions and changes in raw material availability. Affected by centralized maintenance of global commodity pulp production capacity and fluctuations in logistics efficiency, imported wood pulp prices remained in a high-level volatile pattern, with the price gap between softwood pulp and hardwood pulp narrowing slightly. This ongoing volatility has continuously transmitted cost pressures to downstream paper mills, with some small and medium-sized mills facing suppressed operating rates due to unbearable cost burdens.

A key event reshaping the pulp supply landscape was Indonesia’s decision to revoke forestry permits for 22 pulpwood plantations, which significantly reduced domestic pulpwood availability in the country and led to temporary production cuts at major mills. For instance, APRIL announced a temporary reduction of 150,000 tonnes of BHK pulp supply in Q1 2026, while Toba Pulp Lestari temporarily closed its dissolving pulp mill in North Sumatra. Additionally, the delay in APP’s Oki II expansion project further constrained global hardwood pulp supply, resulting in lower-than-expected supply volume of approximately 650,000 tonnes in Q1.

Regionally, softwood pulp spot prices in Europe remained stable at around $680-$730 per tonne, while hardwood pulp spot prices in South America hovered between $590-$600 per tonne. In China, the main contract of softwood pulp on the Shanghai Futures Exchange closed at 5,174 yuan per tonne, with a narrowed year-on-year decline, indicating initial signs of stabilization in the pulp market. Meanwhile, woodchip prices in China rose seasonally by 200 yuan per tonne, further transmitting cost pressures to integrated paper mills.

Q1 2026 witnessed accelerated restructuring of global paper mill capacity, with the industry’s Matthew Effect becoming increasingly prominent. On one hand, backward capacity elimination was intensified: China’s Ministry of Industry and Information Technology released the first batch of backward capacity elimination catalog for the paper industry in 2026, with a total of 1.2 million tonnes of capacity withdrawn in the corrugated paper and containerboard sectors. In North America and Europe, several paper mills announced closures or production cuts due to rising energy costs, aging equipment, and declining demand for traditional printing and writing paper, with some mills converting production lines to packaging paper or specialty paper to adapt to market changes.

On the other hand, leading paper mills are actively accelerating green transformation and capacity optimization. Headline mills have increased the proportion of recycled fiber in new production lines, leveraging the policy dividends of the “paper instead of plastic” initiative. In terms of operating rates, the average operating rate of whiteboard paper producers in China was approximately 49.53% in Q1, a decrease of 5.26 percentage points from the previous quarter, mainly due to concentrated shutdowns and maintenance during the Spring Festival holiday. For major international mills such as Sappi Group, paperboard sales volume remained stable in Q1, with expectations of steady growth in production volume of Somerset Mill PM2 paperboard throughout the quarter.

Inventory dynamics of paper mills also showed obvious seasonal characteristics. Taking whiteboard paper mills as an example, inventory levels showed a trend of first increasing, then decreasing, and then increasing again in Q1: inventory rose in January due to limited terminal orders, declined in February due to shutdowns and maintenance and post-holiday delayed resumption, and increased again in March due to limited demand release and resumption of production. By the end of March, the inventory days of whiteboard paper enterprises remained at around 23 days, with a slight year-on-year decrease, indicating a marginal improvement in inventory pressure.

The global paper trade in Q1 2026 showed a differentiated recovery trend, with regional demand variations and supply chain adjustments driving changes in trade flows. From the perspective of major importing and exporting countries, Vietnam, the United States, and India emerged as the top three paper importing countries, while Vietnam, China, and the United States were the leading exporting countries, accounting for 46%, 21%, and 20% of global paper exports respectively. Notably, U.S. paper imports from Canada showed a downward trend compared with the previous 12 months, reflecting adjustments in North American regional supply and demand balances.

By paper type, packaging paper exports showed a recovery trend, with steady growth in demand from Southeast Asian and Middle Eastern markets, driven by the recovery of the global e-commerce and fast-moving consumer goods industries. North American containerboard producers launched a new round of price increases of $70 per tonne in Q1, with European and Asian packaging paper prices showing signs of following suit. In contrast, the export of printing and writing paper continued its structural downward trend, affected by the continuous substitution of digital media, while the trade volume of household paper remained stable due to rigid demand, though price wars in e-commerce channels persisted.

Geopolitical factors and logistics costs also had a significant impact on paper trade in Q1. The extension of the Middle East conflict led to a surge in energy and shipping rates, indirectly increasing the cost of international paper trade and bringing uncertainty to trade flows. Meanwhile, China’s expanding paper production capacity has become a key variable affecting global trade patterns: the surplus of cardboard has increased export pressure, which may trigger anti-dumping investigations in India, Europe, Brazil and other regions, further reshaping the global paper trade landscape.

Looking ahead to Q2 2026, the global paper industry will continue to face the dual pressure of raw material cost fluctuations and demand differentiation. In terms of raw materials, the tight supply pattern of global pulp is expected to persist, with pulp prices likely to rise moderately, providing support for paper prices. For paper mills, the pace of capacity restructuring will accelerate, and the gap between leading enterprises and small and medium-sized enterprises will further widen.

In the trade sector, the export of packaging paper is expected to maintain a recovery trend, while the demand for specialty paper will grow steadily driven by the “green and low-carbon” trend. However, the traditional off-season of the industry in Q2 may lead to limited demand release, and the supply-demand contradiction in some paper types (such as whiteboard paper) may further intensify, with prices expected to show a seasonal downward trend.

The first quarter of 2026 was a period of adjustment and transformation for the global paper industry. Raw material volatility, capacity restructuring, and differentiated trade dynamics have jointly shaped the industry pattern. For paper mills, traders, and downstream enterprises, grasping the trends of raw material prices, mill operations, and trade flows is crucial to responding to market changes and achieving sustainable development. As the industry enters Q2, adapting to green transformation, optimizing supply chain layout, and seizing regional demand opportunities will become the core strategies for enterprises to break through challenges and gain competitive advantages.