Cost surge, profit reduction, paper companies collectively push up paper prices

Source: Economic Herald, Carton Micro Vision

The reporter learned in the survey that the main factor in the rise in finished paper prices is the impact of rising raw material prices. Respondents believe that in the short-term, as the market enters the peak season, the relationship between supply and demand changes, and foreign waste imports are further tightened, and costs have risen sharply, causing paper companies to raise paper prices.

Production costs soared, operating rates fell, manufacturers collectively pushed up paper prices

"On the 10th, I received a price adjustment letter from Shanying International, which was raised by 100 per ton from the 11th." Zhang Qianqian, deputy general manager of Jinan Kanghui Paper Co., Ltd. (hereinafter referred to as "Kanghui Paper") told reporters.

In fact, in addition to the price adjustment letter of Shanying International, before the Spring Festival, Kanghui Paper has received letters of price increase from a number of companies.

Jinguang Paper (China) Investment Co., Ltd. APP Industrial Paper South China and Jiangsu Bohui announced that the price of white card and copper card has been raised by 200/ton since January 7. Shandong Tianhe Paper Co., Ltd. announced that since January 13th, the white double-sided offset printing paper and thin book paper have been raised by 100/ton in the original price. The high-white and deep yellow double-sided offset printing and thin book paper are based on the original price. Up 200/ton. Galaxy Paper and Meiliyun announced that the price of cultural paper has been raised by 100/ton since January 15. Asia Pacific Semper (Guangdong) announced that since February 1st, the price of its double-adhesive paper and xerographic paper products has been raised by 200/ton (including tax), and the price of brand-wide copy paper and processing brand has been raised by 100/ton (including tax). ).

Chen Lijie, deputy general manager of Jinan Fenghui Paper Co., Ltd., said that the price of pulp raw materials has risen, resulting in a sharp increase in production costs. The price increase of raw paper manufacturers is only the peak period of the cycle. In addition, with the end of the Spring Festival holiday, March will enter the autumn textbook tender season, the market price ushered in upward trend.

In Zhang Qianqian's view, in addition to the above reasons, the suspension of production by small paper mills is also one of the reasons for the rise in paper prices.

Zhang Qianqian told the Economic Reporter that Hangzhou Fuyang, which is known as the “hometown of papermaking” in China, is a microcosm. By 2020, 115 paper companies will be shut down in Fuyang, “a batch of small and medium-sized paper mills will be shut down or integrated. Paper mills have lower operating rates, reduced inventory, reduced supply, and naturally higher paper prices."

“The import volume of waste paper has also dropped sharply this year.” Chen Lijie said, “I imported 17.055 million tons last year and imported 25.72 million tons in 2017. Only 55.271 million tons of 71 papermaking enterprises were approved this year. The amount will drop to zero, once the domestic waste paper can not meet the demand, it will promote the price of finished paper," Chen Lijie said.

The impact of rising costs, paper companies, packaging and printing companies 2018 annual profit decline

For paper mills, rising costs have led to a decline in profits. Recently, major paper companies, packaging and printing companies have released performance forecasts, most of which are expected to decline in 2018.

The profit warning issued by the leading paper company Xiaolong shows that the 2018 interim profit is expected to fall by 45%. Hexing Packaging lowered its performance forecast and the profit amount fell below 277 million.

Bohui Paper's 2018 performance pre-reduction announcement shows that the company expects net profit attributable to shareholders of listed companies to reach 280 million in 2018, which will be reduced by 576 million compared with the same period of the previous year (statutory disclosure data). 67.29%.

Jingxing Paper's performance forecast shows that the company expects net profit attributable to shareholders of listed companies in the 2018 year to be between RMB 330 million and 380 million, a year-on-year change of -48.28% to -40.45%.

After the year, the paper price tone was up, but the increase was limited.

“The premise price of the paper mill Spring Festival is likely to be testing the downstream demand. It is still uncertain whether it can be implemented.” Independent analyst Wang Kai analyzed, “Although the market is in the peak season, the terminal demand is still insufficient, the industry inventory is high, and the new capacity will be In this case, there is a lot of pressure on the paper mill to raise prices."

"Comprehensively, the paper price may show an upward trend after the year, but the increase may be limited. The cultural paper market in June and July entered the low season of demand, and it is not possible to exclude the possibility of paper mills to make profits." Wang Kai predicted.

Editor in charge: Ge Hongyan

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