Mondi Share Price JSE Attempts Rebound on Bike Partnership, Despite S&P 500 Downgrade
After plunging to a decade low on weak demand and industry pressure, Mondi’s share price has shown tentative signs of recovery despite...
Quick overview
- Mondi's share price hit a decade low due to weak demand and disappointing market conditions, but has shown signs of recovery recently.
- The company is investing in innovation and sustainability, including a collaboration to develop a reusable paper-based packaging solution for bicycles.
- Despite some positive developments, S&P Global Ratings downgraded Mondi's credit rating, citing weaker financial metrics and ongoing industry challenges.
- Mondi is responding to market pressures by extending maintenance shutdowns and streamlining its organizational structure to improve efficiency.
After plunging to a decade low on weak demand and industry pressure, Mondi’s share price has shown tentative signs of recovery despite ongoing structural challenges.
Mondi Shares Hit Ten-Year Low Before Modest Recovery
Mondi’s share price came under intense pressure in early November after the group released a disappointing third-quarter update that highlighted weakening demand and deteriorating market conditions. The stock fell to around R182, marking its lowest level since 2015 and capping a difficult year for the paper and packaging giant. At that point, Mondi was down roughly 28% year to date, with long-term moving averages repeatedly capping upside attempts and reinforcing the broader downtrend.
MNPJ Chart Weekly – The Breakdown Continues
Over the past month, however, the picture has begun to stabilise. Shares have retraced higher, pushing back above both the 20-day and 50-day simple moving averages on the daily chart. While this move does not yet signal a confirmed trend reversal, it suggests that selling pressure may be easing and that these levels could now act as short-term support, offering cautious encouragement for investors after a prolonged decline.
Innovation Efforts Support the Bullish Case
Alongside the recent price stabilisation, Mondi has continued to invest in innovation and sustainability, reinforcing its long-term strategic positioning. The company announced a collaboration with Polish bicycle manufacturer Polana Bikes to co-develop a reusable, paper-based packaging solution designed for the transport and storage of premium bicycles.
The new packaging system is intended to simplify assembly, enhance the unboxing experience, and significantly reduce the use of plastic. Central to the solution is Mondi’s ProtectorBAG, a pre-made paper bag engineered to protect key bicycle components such as frames, handlebars, wheels, and saddles from scratches, punctures, and dust during transit.
ProtectorBAG forms part of Mondi’s re/cycle portfolio and is fully recyclable through existing paper waste collection systems across Europe. While initiatives like this are unlikely to offset short-term earnings pressure, they support Mondi’s sustainability credentials and highlight the company’s focus on value-added packaging solutions at a time when traditional paper demand remains under strain.
Credit Downgrade Highlights Financial Pressure
Despite these positive developments, concerns around Mondi’s financial metrics have intensified. S&P Global Ratings recently downgraded Mondi PLC to ‘BBB’ from ‘BBB+’, assigning a stable outlook. The agency cited weaker credit ratios driven by a prolonged downturn in the paper and packaging industry.
S&P revised its EBITDA forecasts for both 2025 and 2026 lower, pointing to persistent oversupply in recycled containerboard and uncoated fine paper. According to the agency, subdued demand and lower selling prices have limited producers’ ability to absorb fixed costs efficiently, weighing on margins across the sector, including at Mondi.
Weak Demand Forces Extended Shutdowns
The sharp sell-off in Mondi’s shares was largely triggered by management’s warning that demand had softened across most pulp and paper grades. To align production with market conditions, the company extended planned maintenance shutdowns at several sites, reducing output in response to lower order volumes.
Chief executive Andrew King noted that while packaging demand has remained relatively resilient, the fine paper segment continues to face structural decline. Competition in this shrinking market has intensified, with producers aggressively cutting prices to defend market share, further eroding profitability.
Industry Headwinds Remain Entrenched
Mondi’s challenges reflect broader pressures across the global pulp and paper industry. Oversupply, weak European economic growth, and the lingering effects of U.S. trade tariffs have combined to suppress demand and inflate costs. After two years of consolidation, the remaining players now face a more competitive environment with limited pricing power.
To adapt, Mondi has announced plans to streamline its organisational structure, reducing its operating divisions from three to two. The move is aimed at lowering overheads, improving efficiency, and speeding up decision-making in what management expects to remain a challenging market environment for the foreseeable future.
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