Mondi | Another kraftliner mill
Last week, Klabin announced it will undertake the construction of a 920ktpa kraftliner mill (+3% global supply). Whilst the scale of the investment does provide a vote of confidence in kraftliner's underlying demand trends, Klabin's announcement will compound fears of impending oversupply. We estimate that cumulative kraftliner capacity additions will weigh of utilisation rates to 2025f. We believe that impendng regulatory changes in China could benefit global containerboard markets. However, until tangible changes in containerboard tradeflows are visible. we remain prudent on the potential impact China could have on global markets. Accordingly, we caution to further short-term downside in containerboard prices as business confidence remains weak.Mondi is a packaging and paper company. Co. is structured into two divisions. Co.'s Europe & International division include: packaging paper, which manufactures and sells a range containerboard and sack and kraft paper; fiber packaging, which manufactures and sells a range of corrugated packaging products, industrial bags and extrusion coatings; consumer packaging, which develops, manufactures and sells consumer packaging solutions, films and release liner; and uncoated fine paper, which manufactures and sells papers for use in printing. Co.'s South Africa division manages forestry operations and manufactures and sells pulp, containerboard, uncoated fine paper and newsprint products.
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