MARUBENI Corp. has dropped a plan to form a paper import company in Japan jointly with Shenzhen-listed Shandong Chenming Paper Holdings Ltd.

Marubeni, Japan's fifth-biggest trading company scrapped the plan after falling prices at home and a weak yen eroded the competitive advantage of imported Chinese paper products. Faced with a mature, crowded market, Japanese paper producers are increasing capacity to lower production costs.

Last July, Shandong Chenming canceled a deal to sell a 30 percent stake for about US$625 million to a Citigroup joint venture, scuppering what would have been one of the largest private equity acquisitions by a foreign buyer in China.