Paper and Light Industry Sector: Cultural Paper Prices Hold Steady This Week, Packaging Paper Trends Diverge

This week the light industry manufacturing sector index rose 2.37%, outperforming the broader market by 1.06 percentage points; the papermaking sub-sector rose 1.06%, underperforming the broader market by 0.25 percentage points. This week the CSI 300 Index rose 1.31% and the light industry manufacturing (Shenwan) index rose 2.37%, outperforming the CSI 300 by 1.06 percentage points and ranking 7th among the 28 Shenwan first-level industries, a relatively high position; among second-level industries, the papermaking sub-sector rose 1.06%, underperforming the broader market by 0.25 percentage points. This week the four major light industry sub-sectors, in descending order of gains, were: cultural and recreational products, packaging and printing, furniture and papermaking, rising 3.53%, 2.89%, 2.49% and 1.06% respectively.

Industry chain data tracking

On raw materials, the delivered price of domestic waste paper (excluding tax) rose slightly, while foreign waste paper prices remained stable; the export prices of hardwood pulp and softwood pulp remained stable, while spot prices declined somewhat; dissolving pulp prices remained stable. (1) This week the delivered price of domestic waste paper (excluding tax) rose by 16 yuan/tonne; the CIF prices of US waste, European waste and Japanese waste OCC at main Southeast Asian ports remained stable; (2) this week the export prices of hardwood pulp and softwood pulp remained stable; the spot price of hardwood pulp fell by 13 yuan/tonne and the spot price of softwood pulp fell by 50 yuan/tonne; in late September 2021 combined wood pulp inventories at China's three major ports were 1.73 million tonnes, down 0.9% month on month; (3) this week dissolving pulp prices remained stable.

This week cultural paper prices remained stable, while packaging paper prices diverged. According to the tax-inclusive average market prices of finished paper compiled by Sublime China Information, this week prices of offset paper and coated paper remained stable, white card prices fell by 37 yuan/tonne, and the average ex-works price of containerboard rose by 33 yuan/tonne.

This week cultural paper profitability improved, while packaging paper profitability diverged. Using the spread between finished paper and raw material prices as a proxy for profitability, this week the profitability of offset paper and coated paper rose by about 11-18 yuan/tonne compared with last week, white card profitability fell by about 25-28 yuan/tonne compared with last week, and the profitability of waste-paper-based paper products rose by about 34-38 yuan/tonne compared with last week.

Finished product inventories of machine-made paper and paperboard fell 0.4% month on month in August 2021. (1) Cumulative output of machine-made paper and paperboard in January-August 2021 was 90.21 million tonnes, up 13.6% year on year; (2) after excluding the effect of price factors, finished product inventories of the machine-made paper and paperboard manufacturing industry (estimated value) in August 2021 rose 3.7% year on year and fell 0.4% month on month; (3) on paper and paperboard imports, the cumulative year-on-year increase in January-August 2021 was 8.3%; on exports, the cumulative year-on-year increase in January-August was 6.0%.

Risk of slowing macroeconomic growth; risk that overseas projects progress below expectations

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378432.html