Pulp prices continue to rise, or will drive changes in the competitive landscape of the paper industry

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“Recently, a pile of discarded cartons at home was just placed in the public space on the floor, but after a while, the discarded cartons were picked up and disappeared.” Ms. Yi told a reporter from China Times on January 8.

Recently, under the ban on foreign waste, the supply in the national waste market has been slightly tight, and the price of waste paper has started to rise again. At the same time, types of paper products such as white cardboard, cultural paper and household paper also rose to varying degrees; however, the current rise in household paper has not been transmitted to the end market.

In an interview with a reporter from China Times, Gao Yan, a finished paper analyst at Zhuo Chuang Information, said that cultural paper, white cardboard, and household paper are all pulp-based products, and the main raw material is pulp. Recently, pulp futures and external disk prices have continuously increased. The cost-side driving factor is a common factor in the rise of paper prices. In addition, pulp and paper promote each other and go hand in hand. The advantages of pulp and paper integrated paper mills are fully demonstrated. “Pulp prices have risen, paper mills have increased production costs, and paper prices have a strong intention to increase prices. In order to increase prices smoothly, paper mills have shut down production and restricted production to control the balance of channel supply and help prices rise.” Gao Yan said.

Paper companies raise prices frequently.

Pulp and paper companies issued a price increase letter in January 2021 again.

As early as December 7, 2020, some paper companies issued the first wave of price increases. One week later, on December 16, Zhejiang, Jiangxi, Hebei and other places paper companies issued the second wave of price increase letters one after another, the price increase range was about 200/ton to 300/ton.

   The four major white cardboard paper companies (Cotai, Bohui, IWC, Chenming) will all issue a January price increase letter on the afternoon of December 24, 2020, with a price increase of 300/ton. After entering the traditional off-season, the price of white cardboard still rose steadily.

In addition to factors other than pulp and paper pushing up white cardboard, Gao Yan analysis believes that the demand for the Spring Festival is still continuing. However, due to the influence of uncertain factors in public health events, the demand for replenishment is difficult to concentrate and increase the volume. This increase can boost downstream As well as the enthusiasm of traders to replenish the inventory; the upgraded version of the ban on plastics in various provinces is conducive to the increase in demand for food cards, and the concept of “replacing plastics with paper” is deeply rooted in the people’s hearts and promotes increased demand.

“Currently, traders’ inventory is still around 1-1.5 months, and the inventory is all high-priced goods. However, due to the current limited market demand, it is difficult for paper prices to increase, and the profits of some traders are under pressure. The rising attitude will definitely boost the current market price. From the perspective of the packaging factory, it is currently the end of the year, and some long-term agreements with the terminal are renewing, and the increase in the price of white cardboard will definitely be able to affect the next year. The price of the implementation agreement has been increased; waste prohibition, production capacity withdrawal, and expansion of white card market demand; strong cost support, pushing up white card price increases and many other factors pushing up white card paper prices.” Gao Yan also said that in 2021 After the start of the relocation of Ningbo Zhonghua’s production capacity in the second quarter, the market supply is tight. After this round of increase, the increase in 20201 may be slightly moderate, and it will set the tone for the white cardboard trend in 2021.

   The rise in household paper has not yet reached end consumers

   As the Spring Festival approaches, the rise in household paper has also attracted attention.

In an interview with a reporter from China Times, Zhuo Chuang Information analyst Yin Ting said that the main factor for the recent increase in the price of household paper is the increase in the price of imported wood pulp. The cost pressure of paper companies has gradually increased, and the increase in paper prices is also reasonable. Among.

   However, the upstream price increase has not been transmitted to the terminal. A reporter from China Times visited Wumart Supermarket on South Second Ring Road and Carrefour Supermarket on South Third Ring Road in Beijing and found no signs of a sharp increase in household paper. On the contrary, various brands of paper products in the two supermarkets are being greatly discounted. , The original price of a certain brand of roll paper dropped from 35 to 16.9.

Yin Ting also said, “This price increase has mainly started in mid-December and has continued to the present. In the short term, some paper companies have issued price increase letters, and the willingness to continue to push prices still exists. However, due to the slow digestion process of the terminal market, It is difficult to accept individual high prices quickly, and the price increase of finished products is slower than that of raw paper. In the short term, we need to focus on the marginal changes in supply and demand.

   Together with white cardboard and household paper, are pulp-based products, cultural paper is also on the rise. Cultural paper issued a new round of price increase letters, APP, Chenming, and Sun coated paper increased by 300/ton; Chenming and Sun all-wood pulp double-glue increased by 500/ton, and non-full-wood pulp increased by 200/ton. Recently, APP, Chenming, Yuezhi, Taiyang, and Huatai many cultural paper mills have issued a January production restriction and shutdown letter. It is expected that the total supply of cultural paper market in January will be reduced by about 200,000 tons.

   Pulp products and paper products have risen in price because of the continuous increase in pulp prices. According to data released by the China Paper Association on December 15th, the total pulp price index in November 2020 rose by 3.04% to 93.00 points, and the total volume index rose by 0.36% to 74.66 points. Among them, the market for bleached needlewood pulp and unbleached pulp Both volume and price increased, while bleached broadwood pulp decreased in volume and increased in price.

According to the reporter’s understanding, from December 21, 2020 to December 27, 2020, the weekly average price of imported softwood pulp was 5,173/ton, an increase of 2.53% from the previous week and 15.74% year-on-year; the weekly average price of imported hardwood pulp was 4025/ Tons, an increase of 3.05% from the previous week and a year-on-year increase of 8.47%.

   containerboard paper welcomes rising expectations

The reporter learned from Zhuo Chuang Information that in early December 2020, individual paper mills in Fujian and Qinhuangdao issued price increase letters, stating that due to the increase in raw material prices and the increase in raw paper production costs, the price of finished paper was increased by 50-100/ton. After the increase plan is released , The market mentality is different, and currently wait and see the follow-up situation of downstream orders.

Then, in December 2020, the leading paper company Nine Dragons Paper (02689.HK) began to announce the Spring Festival shutdown plan. On December 8, Dongguan Nine Dragons Paper stated that the company’s 16 paper machines will start from January 2. The entire shutdown plan will end on March 18; all 16 paper machines in the Dongguan base will be included in the shutdown plan, including PM43, which was newly put into production this year; the longest downtime is 40 days, and the shortest is 7. day. Immediately afterwards, Nine Dragons Paper’s Taicang plant earlier announced its shutdown plan for the Spring Festival next year.

According to the analysis of the research report released by CICC, the Taicang plant earlier announced a shutdown plan for the Spring Festival next year, affecting about 84,000 tons of production capacity, which was significantly more than the 37,000 tons in the same period last year. The previous suspension of production in Dongguan Nine Dragons also affected production capacity significantly more than last year and this year. .

“In late December, under the support of the gradual release of orders for the downstream Spring Festival, paper mills’ shipments improved and downstream carton mill inventories continued to deplete. At the same time, the supply of the national waste market became slightly tight. The price of corrugated paper. Recently, both Taicang Nine Dragons and Dongguan Nine Dragons announced the Spring Festival shutdown plan, which is estimated to affect the total production capacity of 324,000 tons, which is significantly more than the approximately 210,000 tons during the Spring Festival this year, accounting for more than 5% of the industry’s monthly output. Taking into account the strong demand In addition to the shortage of waste paper on the cost side, the firmness of containerboard prices in the first quarter of next year is expected to exceed market expectations. The company’s extended downtime is expected to further ease inventory pressure after the Spring Festival and pave the way for price increases after the holiday.” CICC also added analysis.

CICC predicts that “with the quota for imported waste paper being zeroed, it is estimated that the actual national waste gap in 2021 is likely to exceed 5 million tons, accounting for close to 10% of total waste paper demand. Paper cost support is strengthened.”

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