Ограничение подачи электроэнергии останавливает ведущие фабрики в нескольких регионах; цены на бумагу растут в ряде регионов по мере подъёма акций отрасли

Since the start of this year, the "waste import ban" has been fully implemented, the supply of papermaking fiber raw materials has been tight, and paper companies have made up part of the raw material shortfall by increasing purchases of wood pulp, wood chips and waste paper pulp, which has to a certain extent accelerated the adjustment of the paper industry's raw material structure.

Entering September, the paper packaging industry entered its traditional "golden September and silver October" phase, with market demand and order volumes rising markedly as well. With the Mid-Autumn Festival over and National Day approaching, market demand for corrugated paper and containerboard is strong; combined with the increased demand for express packaging during "Double 11," downstream secondary plants are highly motivated to take goods, paper companies' shipments are smooth, and there is a high probability that market trading will stay active and paper prices will remain high and rising in the follow-up, providing support for paper companies' performance.

Paper companies intensively issue price increases; leaders under staggered power rationing shut down production one after another

As the papermaking peak season arrived in the second half of the year, since August many domestic paper companies—including Bohui Paper and Chenming Paper—have intensively issued price increase notices, raising product prices by 50 to 200 yuan per tonne. According to CCTV Finance, a paper company in Shandong said that since August this year corrugated paper prices rose four times in a row in less than 20 days, with the ex-works price per tonne rising directly from 3,680 yuan to nearly 4,000 yuan, now maintained between 3,850 and 4,000 yuan.

Heads of several paper companies said that this year's rise in domestic waste paper raw material prices is one of the main factors driving corrugated paper prices higher. At the same time, with the implementation of matters relating to the comprehensive ban on solid waste imports, from January 1 this year paper companies' waste paper import quotas were also reduced to zero, making domestic waste paper even scarcer. Statistics show that the national average price of AA-grade corrugated paper in China is currently about 3,870 yuan per tonne, a year-on-year increase of about 15%.

It is worth mentioning that recently the "dual control of energy consumption" has flashed a "red light" in many parts of the country; insufficient coal supply has led to power shortages, and many places have launched power rationing measures. In September, as the industry entered its "traditional peak season," demand and order expectations increased, but for paper companies power rationing means a lower machine operating rate. It is reported that many leading paper companies have already released shutdown and production suspension plans, such as Shanying International as well as Nine Dragons Paper, Lee & Man Paper and Jinzhou Paper, which previously announced shutdowns, all announcing shutdowns for maintenance with downtime ranging from 5 to 10 days.

At present, driven by multiple factors such as the large imported inflation in global energy and chemicals and newly introduced "dual control policies" in various provinces, raw material pulp prices and others have risen and paper companies' costs have increased, all of which will ferment and be reflected in end-product paper prices. At the same time, to ensure price increases land smoothly, paper mills adopt shutdowns and production limits to control the balance of channel supply, which is also an industry convention. Taken together, the factors affecting paper prices include staggered power rationing, regional epidemics, and soaring prices of raw materials such as raw materials and coal. Industry insiders said that paper companies issuing price increase notices intensively is, on the one hand, an attempt to ease cost pressure through price increases, and on the other hand a tentative price increase before the peak season arrives. Judging by past patterns, the simultaneous appearance of price increase notices and shutdown notices will make prices more stable and make high paper prices last longer.

Industry prosperity improves, and paper companies' performance grows markedly

Rising raw materials have also greatly improved paper companies' operating capacity. According to data released by the Ministry of Industry and Information Technology, in January-June 2021 the national papermaking and paper products industry had operating revenue of 714.20 billion yuan, up 24.7% year on year, and total profit of 48.43 billion yuan, up 77.2% year on year. On production, in January-June 2021 national output of machine-made paper and paperboard was 67.425 million tonnes, up 16.0% year on year. In June, national output of machine-made paper and paperboard was 11.902 million tonnes, up 5.8% year on year.

Data from East Money Choice shows that the 25 A-share paper companies in China achieved combined operating revenue of about 93.6 billion yuan in the first half of this year, with 23 achieving positive growth year on year, and 7 of them with revenue growth of more than 50% year on year. It is worth noting that 19 companies had revenue above one billion yuan and 3 companies had revenue above ten billion yuan—Chenming Paper, Sun Paper and Shanying International respectively, all above 15.1 billion yuan. The three companies' combined revenue was about 48.2 billion yuan, occupying more than half of the industry's total revenue. Looking vertically, the vast majority of companies achieved their best ever first-half revenue this year. The TOP10 companies in the first-half paper industry listed company revenue ranking were Chenming Paper, Sun Paper, Shanying International, Bohui Paper, Huatai Stock, Zhongshun Jierou, Yueyang Linzhi, Xianhe Co., Jingxing Paper and Qifeng New Material, among which Chenming Paper had the highest revenue at 17.173 billion yuan.

On net profit, all 25 companies were profitable, with as many as 14 companies seeing net profit attributable to parent company grow more than 100% year on year. The top ten by net profit were Sun Paper, Chenming Paper, Bohui Paper, Shanying International, Xianhe Co., Huatai Stock, Zhongshun Jierou, Yueyang Linzhi, Jinglin Paper and Wuzhou Specialty Paper; the four companies with net profit above one billion yuan were Sun Paper, Chenming Paper, Bohui Paper and Shanying International, whose combined net profit of 6.771 billion yuan accounted for 65% of the industry's total net profit of 10.422 billion yuan. Among them, Sun Paper achieved net profit of 2.232 billion yuan in the first half, becoming the industry's profit king. Likewise, Chenming Paper ranked second with net profit of 2.021 billion yuan, and Bohui Paper ranked third with net profit of 1.514 billion yuan.

A number of listed paper companies said that since the start of this year, under the framework of the "carbon peak, carbon neutrality" rules, the balance of competition in China's paper industry has tilted towards leading enterprises, and scale-based and intensive development has become the trend; higher industry concentration offers greater advantages for carbon neutrality and environmental management, is more convenient for government supervision, and will also reverse the lose-lose situation of the past in which many players engaged in malicious competition and grabbed the market with low prices and low quality. In addition, in the first half of this year, the paper industry's prosperity improved, driving paper product prices up, while wood pulp prices continued to rise steadily, benefiting large integrated pulp and paper enterprises, and the paper industry sector's profitability grew markedly.

The papermaking sector surges, leading the two markets

Shanxi Securities said that in the short term the Mid-Autumn Festival and National Day are the traditional peak demand season for the corrugated paper and containerboard market, and the increased demand for express packaging during "Double 11" means downstream secondary plants are highly motivated to take goods and paper companies' shipments are smooth; follow-up market trading is expected to be active and paper prices are likely to rise. A paper industry analyst at Sublime China Information said that in the long term the fourth quarter is still the traditional consumption peak season, and combined with the continuously tight supply of domestic waste yellow board paper this year, this will also support paper prices; corrugated containerboard prices in the fourth quarter are expected to be mainly characterised by narrow-range fluctuation upwards.

In the secondary market, affected by price increases, many stocks in the papermaking sector have gained more than 10% over the past month. Among them, Huatai Stock gained more than 57%, Meili Cloud more than 28%, Qingshan Paper more than 20%, and Sun Paper and Chenming Paper gained more than 14% and more than 11% respectively.

On September 23, encouraged by price increase news, the papermaking sector surged again and led the two markets by a wide margin, with the sector index rising nearly 7%. As of midday, 15 stocks hit the daily limit up, including Jingxing Paper (002067.CN), Yueyang Linzhi (600963.CN), Huatai Stock (600308.CN), Yibin Paper (600793.CN), Sun Paper (002078.CN), Qingshan Paper (600103.CN), Bohui Paper (600966.CN), Wuzhou Specialty Paper (605007.CN), Chenming Paper (000488.CN) and Shanying International (600567.CN), while Kelao Co. (301009.CN) rose more than 16%, and Forest Packaging (605500.CN), Rongsheng Environmental Protection (603165.CN) and other stocks rose sharply in sympathy.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378331.html