Shares of Cheng Loong Corp (正隆紙業), the nation’s biggest maker of industrial paper, surged to their highest level in 10 years yesterday after the company announced price increases for next month’s shipments.
The company on Thursday said it would increase prices by NT$1,500 per tonne, or nearly 10 percent on average, to reflect rising raw material and transportation costs.
The latest hikes would be the company’s second price increase since December last year, when it announced an increase of between 12 percent and 15 percent, or NT$1,500 per tonne.
Cheng Loong said an upward global trend in wastepaper prices is also a culprit for the hikes.
Prices of wastepaper, the most important material to generate pulp, soared by US$70 per tonne to US$290 in the US last month, the company said, which sources about 30 percent of its wastepaper from Taiwan and the remainder from the US, Japan and Europe.
The quoted price for shipments of wastepaper this month rose 65 percent to US$298 from a year earlier, the highest in six years, the company said.
“Our Chinese peers have raised their prices by more than 30 percent from a year ago to reflect material and labor costs,” said a Cheng Loong official, who declined to be named.
Commenting on the price adjustment, local rival Long Chen Paper Co (榮成紙業) said it would follow the market.
“We will take our customers’ feedback into account when adjusting prices,” Long Chen vice president Tsou Yung-fang (鄒永芳) said by telephone.
The uptrend is likely to remain in the near term as the undersupply problem in China continues, Tsou said.
YFY Inc (永豐餘) is also considering raising prices to reflect hightened costs, the company said.
Shares of Cheng Loong increased 9.93 percent to close at NT$16.05 in Taipei trading yesterday. Long Chen shares gained 3.19 percent to NT$34 and YFY were up 4.82 percent at NT$11.95.
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