The hottest paper mills shut down one after anothe

2022-10-18
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Paper mills shut down one after another to escort the price increase? Will this wave of operation raise the price of paper

release date: Source: 21st Century Business Herald editor: Bao's number of Views: 1890 copyright and disclaimer

core tip: "affected by the recent continuous rise in raw material prices, since June 26, our white card and copper plate card products have been increased by 300 yuan/ton from the current price." Chenming Group pointed out in its notice on June 25

"affected by the recent continuous rise in raw material prices, our white card and copper plate card products have been increased by 300 yuan/ton on the basis of the current price since June 26." Chenming Group pointed out in its notice on June 25

not only white cardboard, coated paper, corrugated paper and other paper types have also started to follow up the price adjustment this week. In this regard, the price adjustment letter of a paper enterprise in Shandong gives a very core reason. The domestic waste paper price continues to rise and it is difficult to receive goods. The state strictly controls the import of waste paper. In addition, the company pointed out that the general secretary of the environment and learning pointed out that the investment of insurance work funds has increased

"today, the transaction price of corrugated paper in Shandong is around 4500 yuan/ton, but class a waste paper has to be sold to 3000 yuan, plus the production cost of 1500 yuan per ton, which has reached the breakeven line." Fang Juntao, an analyst of zhuochuang information paper industry, said on June 27

on the one hand, the profit space is constantly being squeezed. On the other hand, it also faces high inventory and sluggish demand. Therefore, many industry leaders, including Chenming Group, app and Wanguo paper, have recently issued shutdown notices to protect the safety of products by raising prices

the environmental protection whirlwind is blowing fiercely, and the operating rate of small and medium-sized paper enterprises is significantly reduced.

unlike the active shutdown of leading paper enterprises, the recent shutdown of small and medium-sized enterprises appears to be much more passive

take Fuyang, Zhejiang, the "hometown of papermaking", as an example, local papermaking enterprises have experienced very strict environmental inspection. According to local media reports, Fuyang environmental protection continued to carry out special law enforcement, cross law enforcement, night law enforcement and weekend law enforcement. By the middle of June, 695 enterprises had been inspected, 162 cases were to be filed for investigation and 11 cases were to be sealed up and detained

among them, 10 enterprises, including Fuyang Fusheng paper products Co., Ltd. and Fuyang guanlow paper products Co., Ltd., plan to file a case for investigation on suspicion of illegal acts such as dumping dangerous goods at will and using highly polluting fuels. This environmental law enforcement act, known as the "hundred day battle", will continue until mid August this year

Guangdong, Hunan, Jiangxi, Henan and other provinces are also facing similar situations. Yu Lianying studied the process and performance of producing flame-retardant building and decoration materials with waste thermoplastic and sawdust powder. The flame-retardant performance of the obtained materials reached the requirements of non combustible building materials specified in the national standard (gb5464 ⑴ 985). For this reason, Shantou tengfa Paper Co., Ltd. was detained for burying concealed pipes to secretly discharge wastewater, and four people were detained

this round of environmental protection inspection began with the "look back" action in early June. Guangdong and Jiangsu, two major papermaking provinces, and Henan, where there are more small and medium-sized paper enterprises, are within the scope of this inspection, so there was the scene of the above intensive investigation

"small enterprises are seriously affected. For example, the start-up time in the first half of the year may be only 2 months, and they often go through the stages of rectification and acceptance." Lu Yaya, an analyst of Baichuan information paper industry, said on June 27

although the rectification and shutdown of small enterprises are difficult to have a fundamental impact on the supply-demand relationship of the whole market, the weakening of the supply side undoubtedly brings some confidence to the industry leaders to raise prices

both foreign waste and national waste are rising, and the profits of paper enterprises are compressed

more importantly, the rise in cost is sharply compressing the profit space of paper enterprises

according to the data provided by Baichuan information, on January 13, 2018, the domestic waste yellow paperboard was about 2000 yuan/ton, which rose to nearly 3000 yuan by the end of May this year. Although it fell by 300 yuan per ton in June, the price of this paper began to rise again in late June

"today, the mainstream quotation of grade a waste paper has laid a solid foundation for breaking through the development of full-size wallboards. The recent rise is largely affected by the import restrictions of domestic and foreign waste. For example, 100% open box inspection and Quarantine of American waste began in May, and then the inspection cost and cycle are also increased." Fang Juntao said

the change of relevant data is also sufficient to explain the current tight supply of external waste. As of late June, 14 batches of domestic and foreign waste paper had been approved for import. The cumulative approved import volume of the first 13 batches was 10.8421 million tons. There was no waste paper import quota in the 14th batch, while the total approved import volume of domestic waste paper in 2017 was 28.0688 million tons

the reduction of import volume has directly led to the rise of the prices of foreign and domestic waste, which has been transmitted all the way to the profit link of paper enterprises. As a result, the price trend of corrugated paper was stronger than that of white cardboard, but the profit fell near the break even line

the demand is weak, and the effect of "downtime and price protection" is unknown.

the direct means to alleviate the rising cost is to raise the price, but it will certainly inhibit the demand. How can we reduce this negative impact

this can only be done from the perspective of supply and demand, so in late June, leading paper enterprises have issued shutdown notices

"Zhanjiang Chenming white cardboard and Jiangsu Bohui have taken the initiative to shut down recently, which is also to protect the product price. Since May, the price of white cardboard fell by nearly 1000 yuan per ton, and did not rebound until the price rise notice was issued at the end of June." Lu Yaya said that in addition to wrapping paper, coated paper and paper have also fallen near the cost line

Fang Juntao also holds a similar view, "there is feedback from enterprises that they hope to stabilize prices through downtime and further digest the inventory accumulated in the early stage."

it is not difficult to see that the recent shutdown of leading paper enterprises is a helpless move. The consumption off-season superimposed with high inventory and rapid rise in costs can only stabilize prices by adjusting their own production capacity

21st Century Business Herald learned that the domestic cultural paper production capacity concentration is high, for example, the production capacity of Enterprises above the scale of coated paper accounts for 60% to 70%. "Coated paper production makes the lower platen production enterprises relatively limited. If all enterprises can reach an agreement, they really have the ability to support the price." Lu Yaya commented

however, the active price support of manufacturers cannot compete with the relationship between supply and demand, and the effect of "downtime and price protection" is still unknown

"the market is used to buying up rather than buying down. Raising prices is also conducive to manufacturers' digestion of inventory to a certain extent, but it is difficult to determine whether the price can stabilize." A paper trader in Qingdao said on June 27

from the perspective of supply and demand, it is difficult for the demand side to have significant increases in the short term, and even the demand decline may exceed expectations. "At present, it is in the off-season of consumption, and it is normal for downstream demand to weaken, but this year's demand side is significantly weaker than in previous years." Fang Juntao said

In other words, environmental factors and rising costs have weakened the supply side, but the slowdown in demand growth is more obvious, which is obviously not good news for manufacturers

therefore, the effect of "shutdown and price protection" in the short term is nothing more than to stop the decline. The real turnaround still needs to wait for the obvious improvement on the demand side

"traditionally, the peak season starts in late August and will continue until the end of the year. At that time, driven by holiday consumption, demand will rise significantly. Before that, in July and August, the operating pressure of the paper industry will still be relatively prominent." Lu Yaya said

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