Пик сезона упаковочной бумаги наступает по мере синхронного повышения цен производителями, знаменуя вторую волну роста цен в отрасли в этом году

At the end of the year, the successive arrival of Double 11, Double 12, New Year's Day and the Spring Festival has pushed packaging paper into a peak demand season. As costs for raw materials, energy and other inputs remain high, paper companies have set off a second wave of price increases this year.

Recently, Nine Dragons Paper, a leader in the papermaking industry, announced that starting from November 16, corrugated paper and white board paper at its Dongguan, Quanzhou, Taicang, Tianjin, Chongqing and Shenyang bases will be raised by 100 yuan/tonne on the basis of current prices.

It is reported that this is not the first time Nine Dragons Paper has issued a price increase letter. As early as October this year, Nine Dragons Paper set a record by issuing six price increase letters in a single day. The notices stated respectively that from October 13, Dongguan Nine Dragons, Tianjin Nine Dragons and Chongqing Nine Dragons would raise corrugated paper and kraft linerboard by 100 yuan/tonne, and that from October 18, grey-back white board and white-top/coated kraft linerboard would be raised by 100 yuan/tonne.

Corrugated and linerboard prices see the largest increase

Paper prices have been rising continuously recently. In addition to Nine Dragons Paper issuing six price increase letters in one day, which drew market attention, APP (China), Sun Paper and Bohui Paper also issued price increase letters one after another. On November 8, Sun Paper said the company would raise the price of ordinary woodfree offset paper products by 200 yuan/tonne on the basis of current prices. Before this increase, on October 25, Sun Paper had already issued a price increase notice. The notice stated that from November 1, ordinary coated art paper products would be raised by 300 yuan/tonne on the basis of October prices.

The "group price increases" by a number of listed paper companies have undoubtedly added fuel to the paper market.

It is reported that this is already the second wave of paper price increases in China this year. As early as May this year, paper prices had seen a wave of increases due to the shortage of raw materials and the impact of the plastic ban.

Regarding this round of paper price increases, an analyst at Tianfeng Securities pointed out that corrugated and linerboard prices have risen relatively sharply, small and medium-sized paper mills are clearly following the trend, while for cultural paper the price increases are concentrated among leading enterprises.

Specifically, the price of corrugated paper, which is used for transport outer packaging cartons and food outer packaging, has risen most prominently recently.

According to data, at the beginning of the year the average ex-factory price of Nine Dragons Paper's corrugated paper was 3,980 yuan/tonne, while by November 8 it had risen to 5,090 yuan/tonne. In addition, Nine Dragons Paper's Dongguan base recently issued an official letter on machine shutdowns around the Spring Festival. The letter stated that the Dongguan base would begin Spring Festival shutdown maintenance from January 22, 2022, involving kraft linerboard, corrugated paper, white board paper and others, with the shutdown duration of a single paper machine ranging from 7 to 21 days, and the latest shutdown extending to April 21 next year. Based on designed capacity, this Spring Festival shutdown is expected to reduce the company's output by 485,000 tonnes. From the perspective of supply and demand, this is not favorable for the corrugated paper market price to fall back.

As for cultural paper, several paper industry leaders including Bohui Paper, Shandong Sun Paper and APP Golden Paper announced that from November 1, various paper grades would rise by another 300 yuan/tonne on the basis of October prices.

Waste paper prices follow the rise

In terms of waste paper, as the prices of finished paper and base paper continue to rise, domestic waste paper recycling prices have also been continuously raised since November. On November 1, the East China region raised prices by 20-50 yuan/tonne. Among them, Zhejiang Jiaxing Jingye (from November 1) raised waste paper prices by 30-50 yuan/tonne; Zhejiang Huachuan Industrial (from November 1) raised ABCD prices by 50 yuan/tonne; Shandong Dezhou Depaike Paper (from November 1) raised the prices of ordinary blue board, supermarket and pagoda tube by 30 yuan/tonne. In addition, paper prices in North China, South China and Central China all saw increases. North China raised prices by 30-50 yuan/tonne, South China by 20-30 yuan/tonne, and Central China by 30-50 yuan/tonne.

According to industry insiders, once waste paper prices start a new upward trend, it will continue for a short period of time. In addition, affected by the waste plastics ban and the waste import ban, and by the surge in packaging paper orders during the Double 11 and Double 12 e-commerce festivals, demand for finished paper and waste paper has also increased accordingly. Industry insiders analyze that in the short term the trend of waste paper prices will basically follow the same upward trend as base paper prices.

Pulp and waste paper have always been the two major raw materials for the papermaking industry. It is worth noting that, amid the market sentiment of continuously rising base paper and waste paper prices, the spot market for pulp raw materials has been fluctuating downward, with domestic pulp prices at a relatively low level within five years. Pulp and finished paper prices have become decoupled, which is rarely seen.

Regarding the reasons for this "group price increase" by listed paper companies, the head of the Dongguan Paper Industry Association analyzed: "The main driving force is the rapid rise in raw materials such as waste paper, thermal coal and chemicals. In addition, the previous power rationing also affected papermaking enterprises. As the paper market ushers in a peak demand season before the end of the year, limited capacity coupled with supply-demand imbalance has caused this round of paper price increases."

According to data, in the cost structure of the papermaking industry, raw materials account for 60%-70%, and energy such as electricity and coal accounts for about 10%-15%.

Against the backdrop of the dual policies of the "plastic ban" and the "waste ban", China's waste paper supply gap is expected to reach 6.89 million tonnes this year. At the same time, affected by the pandemic, the supply of pulp, which China mainly relies on imports for, is insufficient. Data shows that China is the world's largest importer of pulp raw materials, with 90% of pulp raw materials imported from Canada, Finland and other places. The shortage of raw materials is an important factor affecting this round of paper price increases.

As the Northern Hemisphere gradually enters winter, the demand for coal used as fuel for power generation is growing. Coal and electricity prices have risen generally. The rise in prices of coal power and of auxiliary production materials used in papermaking, such as chemicals and starch, is also an important factor in this round of paper price increases.

Under cost and operating pressure, major paper mills have announced price increases one after another. On November 3, Nine Dragons Paper issued a price increase letter stating that, because the prices of raw and auxiliary materials for papermaking and logistics costs remain high, and in order to ensure normal production and supply and to continuously and stably provide high-quality products and services to customers, the company decided to raise finished paper prices by another 100 yuan/tonne. At the same time, Chenming Paper also stated in its notice that, due to the sharp rise in the prices of energy and chemical raw materials such as thermal coal and caustic soda, the company would raise the order price of Chenming cultural paper series products by 300 yuan/tonne from October 8, and would raise Chenming cultural series products by another 300 yuan/tonne after October 25.

In addition to the rise in prices of main and auxiliary production materials that increased production costs, the imbalance between supply and demand also drove this wave of paper price increases. Affected by the dual control of energy consumption and power rationing, the operating rate of the papermaking industry has generally been insufficient recently. The successive arrival of Double 11, Double 12, Christmas and New Year's Day has led to strong demand for packaging paper, and the papermaking industry has entered its year-end peak demand season. The supply-demand gap has fueled this round of paper price increases.

Will paper prices rise further at the end of the year?

It is worth noting that although paper prices have been rising, affected by the dual control of energy consumption and rising raw material costs, the performance of the papermaking sector in the third quarter was not ideal, and share prices have remained at a low level.

According to research data from Southwest Securities, in the third quarter the revenue and net profit growth of the papermaking sector slowed, with revenue of 49.3 billion yuan, up 17.4% year on year, and net profit of 2.5 billion yuan, down 12.7% year on year.

Other data shows that among 12 companies in the paper concept sector, 9 companies saw their gross profit margin in the third quarter of this year decline to varying degrees compared with last year. Among them, Chenming Paper and Sun Paper both saw their third-quarter performance decline significantly quarter on quarter.

On October 29, Chenming Paper released its third-quarter financial report. The report showed that in the first three quarters of 2021 the company achieved operating revenue of 25.76 billion yuan and net profit attributable to the listed company of 2.18 billion yuan; of which the company's net profit in the third quarter was 161 million yuan, a decrease of 80.9% quarter on quarter compared with 842 million yuan in the second quarter, and a decrease of 86.36% compared with 1.18 billion yuan in the first quarter.

On October 27, Sun Paper released its report for the first three quarters of 2021. The report showed that in the first three quarters of 2021 the company achieved total revenue of 23.71 billion yuan and net profit attributable to shareholders of the listed company of 2.77 billion yuan; of which third-quarter operating revenue was 7.9 billion yuan, a decrease of 3.3% quarter on quarter compared with 8.17 billion yuan in the second quarter; and third-quarter net profit was 537 million yuan, a decrease of 52.2% quarter on quarter compared with 1.124 billion yuan in the second quarter.

At present, major paper companies are raising prices one after another, so what will be the trend of paper industry prices at the end of the year? Ye Qing, deputy director of the Hubei Provincial Bureau of Statistics and a professor and doctoral supervisor at Zhongnan University of Economics and Law, said in an interview with a reporter from China Times: "The wave of price increases in the papermaking industry will continue for some time in the future. Rising costs in the papermaking industry are a key factor, and it is hard to find substitutes."

According to another analysis by industry insiders, the second half of the year is the traditional peak sales season for the papermaking industry, various raw materials remain at high levels, and paper prices are expected to continue fluctuating upward. With the frequent raising of paper prices, the game between upstream and downstream players in the papermaking industry chain may intensify.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-378662.html