According to the Financial Associated Press (Guangdong, reporter Xu Xuecheng), “The new round of price increases is a matter of these days. Like Gaowa, many paper mills have increased by at least 50 yuan / ton.” The person in charge disclosed to reporters.
After the “May Day” holiday, a wave of raw paper price increases jointly initiated by multiple paper mills attracted market attention. The reporter of the Finance Association learned that the price increase of the main varieties is between 50-100 yuan / ton, especially the corrugated paper with greater demand. According to industry insiders, since the beginning of this year, the overall price of base paper has changed particularly frequently: it reached a high level at the end of February and early March, and began to fall in April. At present, there are “bulls” of price increases.
The increase in the price of raw paper is good for the head companies in the paper industry to improve their performance, but the downstream packaging industry may experience rising cost pressures. Relevant analysis believes that the industry logic of “demand is king” has not changed, the downstream demand is cautious, and the paper industry’s boom industry is likely to be unsustainable.
Corrugated paper has risen by 50 yuan / ton
Mr. Peng is the head of a color printing and packaging factory in Gaobu Town, Dongguan City, Guangdong Province. His upstream suppliers are mainly cardboard factories. In an interview with reporters on May 12, Mr. Peng revealed that after the “May Day” holiday, the price of raw paper did rise compared to before.
“Like Gaowa, many manufacturers have increased by 50 yuan / ton, and the better quality has risen by 100 yuan / ton,” Mr. Peng said “high-watt” refers to “high-strength corrugated core paper”, which is the Of “excellent products”. According to its disclosure, Guangdong’s large paper mills, such as Nine Dragons Paper, Wanteng Paper, Shuangzhou Paper, etc., have already raised prices by 50 yuan to 100 yuan per ton for mainstream varieties.
The reporter called Jiulong Paper and Wanteng Paper on the 12th respectively, intending to inquire about the price of related products, but as of press time, no reply was received. Chenming Paper (000488, SZ) (000488.SZ) said that after the Spring Festival, there was indeed a wave of paper prices rising, but it has recently begun to fall. The company’s main white cardboard and coated paper prices have not changed significantly. It is worth noting that Chenming Paper is a paper-making enterprise with a high raw material self-sufficiency rate, and is relatively less affected by changes in upstream prices.
A dealer who did not wish to be named revealed to reporters that the increase in the price of some paper products was a spontaneous move by the sales channel, on the grounds that the production of raw paper manufacturers restricted and reduced production and there was a shortage of supply.
According to public information, on May 8, after the May Day, paper mills in nine provinces of Guangdong, Fujian, Jiangsu, Shandong, Anhui, Hebei, Shanxi, Sichuan, and Inner Mongolia “jointly” increased prices by 30-100 yuan / ton Not equal. Among the price-increasing paper companies are the aforementioned Nine Dragons Paper, Chenming Paper and Shuangzhou Paper.
However, research institutions, packaging plants, and distributors hold different views on the reasons for the price increase of the paper industry.
Zhuo Chuang Information pointed out that the first factor affecting the market trend is the increase in the price of raw materials and waste paper, and the increase in costs supports the increased willingness of paper companies to increase prices; There are many overhaul paper companies, and the decline in the industry’s construction has also driven down market supply.
Mr. Peng believes that in recent years, the national environmental protection rectification has become more and more intense, small paper mills have lost their living space, and the market is gradually being controlled by large mills. As for the price rise and fall, the right to speak is in the hands of large manufacturers, and the so-called “downtime maintenance”, reduction of production, and limited production are mostly “exceptions” for large manufacturers to manipulate market prices.
The aforementioned dealers admitted that the downstream demand was weak due to the impact of the epidemic. “If there is a chance, it can rise a little bit.”
Boom market is hard to sustain
Opening on May 12, many stocks in the paperboard sector rose, and the benefits brought by the price increase have begun to show.
However, for the downstream packaging industry, which is already operating with difficulties, the price increase of raw materials is no different than “adding to the misfortune.” Mr. Peng admitted that due to the epidemic and weak consumption, the company’s downstream customers were blocked and the demand for packaging boxes decreased accordingly. “Some of the peers are mainly American customers, and orders have dropped by 80%, and they have no income. If the upstream price increases again, the day will only be more sad,” Mr. Peng said.
Wanshun New Material (300057.SZ), part of which is paper packaging, (300057.SZ) said that the overall price of packaging paper is indeed rising, but the company mainly uses white cardboard and the price fluctuation is not obvious. For the rising costs, the company admitted that it can only be passed on to the downstream.
Whether paper prices will continue to rise in this regard is a topic of great concern to all parties.
Mr. Peng said that since this year, paper price fluctuations have been particularly frequent. The overall price began to rise gradually at the end of February and reached its highest point in March this year. However, the high price has only remained for half a month, and by April, it has begun to fall back. He judged according to this, the price increase after the May Day holiday was only short-term fluctuations, not a long-term trend.
According to the statistics of Zhuo Chuang Information, as of May 8, except for cardboard and corrugated paper, which have increased by 17 yuan / ton and 25 yuan / ton respectively from last week, the prices of coated paper and double-coated paper have risen. Weeks have fallen, while the prices of white cardboard and whiteboard have remained flat. In addition, the price of household paper also dropped by 40 yuan / ton from last week. Zhong Shunjierou (002511, shares it) (002511.SZ) Dong Mi Zhou Qichao also revealed to reporters that the current price fluctuations are mainly for industrial paper, and the prices of raw materials and finished products of household paper have remained stable.
The data of Zhuo Chuang Information as of May 11 shows that except for individual paper companies in Guangdong, Henan, Shandong and other places that raised the price of corrugated paper, the prices of other categories have basically stabilized.
In this regard, Zhuo Chuang Information Analysis pointed out that the overall downstream mentality of finished paper is still cautious, and the amount of waste paper received by paper mills has decreased while the inventory of packaging stations has increased slightly. After the completion of the downstream cardboard factory’s warehouse replenishment operation, the sales of finished paper may decline, and the situation of improved sales may be difficult to last.
Huaxi Securities Research believes that with the increase in the volume of waste paper arrival, packaging paper factories are actively resuming work, and the overall lack of downstream demand will lead to a correction in the price of packaging paper. In the short term, the price has stabilized. It is expected that the subsequent consolidation will be the main.
Everbright Securities pointed out in the paper industry’s weekly report as of May 10 that in the short term, the impact of the epidemic is still ongoing, and the follow-up focus will be on the performance recovery brought about by the rebound in demand. In the long run, the increase in industry concentration will be a major trend in the future. The impact of the epidemic will accelerate the clearing of small production capacity in disguise, and the head companies will benefit from it.
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