After setting off a wave of price increases in mid-June, recently, many paper manufacturers, including Chenming Paper, APP, etc., issued price increase letters again, announcing that starting from July 1, the prices of the company's paper types will increase in June. Basically, the price is increased by 200 yuan/ton.
Faced with the industry dilemma of “it has been bottoming out and it is difficult to get up” in the first half of the year, the paper industry once again sounded the clarion call to “call for rising prices and stop falling” in the second half of the year.
The traditional peak season of the industry in the second half of the year is approaching. However, under the current background, will the paper industry be as predicted by some institutions: demand recovery, cost reduction, and profitability improvement? Can the new round of price increases by paper companies keep pace with the recovery of the industry's prosperity?
“I can’t remember how many price increase letters I received from paper mills in the first half of the year.” Mr. Shi, the person in charge of a large paper packaging company in Zibo, Shandong Province, said: “Since the beginning of this year, the cost of raw materials and other materials has been high, and paper companies have It is a last resort, but terminal demand is weak and recovery requires a long process. Our packaging companies are also extremely difficult. In summary, many paper companies have failed to effectively implement price increases in the end. "
In addition to household paper, other finished paper prices have recently increased. Implementation is weak. corrugated paper and containerboard paper announced a price increase of 100-150 yuan/ton, and it would be great to finally implement an increase of 50 yuan/ton; it is more difficult to increase the price of cultural paper. In May, the price increase was announced to be 300 yuan/ton, and the actual increase It has also been implemented at 50 yuan/ton.
The reason is still the contradiction and game between supply and demand. From a cost perspective, for pulp paper types such as cultural paper and white cardboard, the continued high fluctuations in pulp prices have brought huge cost pressure to paper companies.
In order to alleviate or pass on upstream cost pressure, paper companies can only transmit it to downstream in the form of price increase letters. Unfortunately, due to factors such as the epidemic, terminal demand has been weak, so downstream processing and packaging companies are constantly calling for price reductions.
The paper industry is basically "seeing increases but not falling". Letters will only be sent when prices increase, and when prices decrease, they usually drop silently. Therefore, even if paper companies "cry up" every month, they are still unable to defeat the weakness on the demand side, resulting in paper prices for most paper types falling in the first half of the year.
At the beginning of this year, the disturbance factors on the supply side of international wood pulp are gradually easing. Under the weak supply and demand situation, pulp prices are expected to fall back to fundamentals. Marginal improvement in terminal demand for finished paper is still expected, and the weak terminal demand may rely on the recovery of consumption and production after the epidemic.
As the epidemic situation in many places eased in June, coupled with the stimulation of shopping festivals, and the subsequent improvement of the consumption environment, paper companies can destock smoothly, and the possibility of rising prices in the peak season cannot be ruled out.
Affected by multiple factors this year, large paper mills are in the process of steady expansion, while the elimination of small paper mills has not been fully accelerated, and the industry concentration has not increased significantly yet.
However, the high fluctuations in international pulp prices have made the advantages of leading companies with forestry, pulp and paper integration capabilities more prominent. At present, companies with "forest-pulp-paper integration" such as Sun Paper and Chenming Paper have greater competitive advantages. For the development pattern of the paper industry with a high proportion and high dependence on imported pulp, It is indeed "the one who wins the pulp wins the world."
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