The hottest supply and demand sides jointly promot

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Both supply and demand sides jointly promote the paper industry to bid farewell to the cold winter

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core tip: starting in 2016, some places have gradually eliminated the local pollution backward whiteboard production capacity, a large number of whiteboard production capacity has been eliminated, and the paper industry is facing dual pressure from policy and industry competition

since 2016, some places have gradually eliminated the backward whiteboard production capacity of local pollution, and a large number of whiteboard production capacity has been eliminated. The paper industry is facing dual pressure from policy and industry competition. However, recently, the price of paper products has been rising. Since December 2020, the domestic paper price has continued to rise. Many paper companies have issued price increase letters, and the price has generally increased by about 200 yuan/ton

Shandong Chenming, Shandong Taiyang, Shandong Huatai Paper and other paper mills have successively issued price increase letters and shutdown plans for January 2021. The planned price increase is 200-500 yuan/ton, and the prices of some small and medium-sized paper mills follow up by 100 yuan/ton. Affected by the shutdown, the supply-demand relationship is expected to continue the price increase. Judging from the current situation, the paper industry seems to have bid farewell to the cold winter and started a new round of recovery

the result of the joint promotion of both supply and demand

in fact, both supply and demand play a role in driving this round of paper price rise, but mainly due to the rise of raw material costs. According to the classification of raw materials, pulp is mainly divided into wood pulp, waste pulp and non wood pulp (bamboo pulp, straw pulp, etc.), while wood pulp is divided into broad-leaved pulp and coniferous pulp according to different wood species. Different kinds of paper pulp are also different. The raw materials of household paper such as roll paper and napkin are mainly composed of about 30% coniferous pulp and about 70% broad-leaved pulp. According to the data, the spot prices of coniferous pulp and broad-leaved pulp increased by 13.9% in December, meeting the demand of the rapidly developing domestic automotive industry by 17.1%, and increased by 825 yuan/ton and 600 yuan/ton respectively compared with the lowest price in the whole year

the rise in pulp prices is also caused by many factors. From the perspective of supply and demand pattern, according to the latest data of pppc, the global production of needle pulp in 2020 is expected to be 27.985 million tons, a year-on-year decrease of 2%, while the global production of broad-leaved pulp in 2020 is expected to be 37.985 million tons, a year-on-year increase of only about 0.2%. With the accelerated recovery and resumption of production of the paper industry, the demand for pulp has increased. At the same time, the supply pattern of the wood pulp industry is relatively centralized, and the concentration of large overseas pulp enterprises has increased, resulting in their strong voice in price. Pulp prices can be controlled by controlling the speed of production capacity

in addition, the continuous shutdown and maintenance of leading paper mills also limited the release of paper production capacity, further promoting the rise of paper prices. On December 28, Shanying international issued a notification letter saying that it would shut down 17 paper machines in its five production bases in Anhui, Zhejiang, central China, Fujian and Guangdong for days from February 1 to March 15, 2021, mainly involving carton paper, corrugated paper, paper, etc. Among the 17 paper machines that Shanying stopped for maintenance during the Spring Festival in 2021, there are 10 box paper machines, 4 corrugated paper machines, and 1 paper machine, white paper machine and special cooling paper machine. It is estimated that the shutdown is expected to affect the output of about 140000 tons, including about 130000 tons of box board paper and corrugated paper

the substitution of plastic products is the demand side factor driving the price rise of paper products. In January 2020, the state issued the strictest "plastic restriction order" to comprehensively restrict the use of non degradable plastics. According to the opinions jointly released by the national development and Reform Commission, from January 1, 2021, supermarkets, pharmacies and catering takeout services in municipalities, provincial capitals and other regions will take the lead in banning plastic, and promoting the use of degradable shopping bags, environmental protection cloth bags and paper bags. Based on the high cost, insufficient production capacity, limited convenience and application scenarios of cloth bags in the current alternative solutions, paper products have sufficient production capacity, mature production technology and obvious cost advantages, making them the best substitute for plastic products. Among them, as food packaging paper, white cardboard is expected to take the lead in becoming a substitute for takeout lunch boxes. It is expected that there will be a replacement demand of about 500000 tons of white cardboard in 2021. With the ban, the control accuracy is not inferior; With the promulgation and implementation of the plastic order of the microcomputer controlled electro-hydraulic servo universal experimental machine with load sensors, the consumption of plastic products has decreased, and the packaging box made of white cardboard with raw wood pulp as the main raw material has become the main substitute, which will further promote the rise of paper prices

the advantages of leading enterprises have been highlighted

from an overall perspective, the scale of the paper industry has continued to grow in the past few years, and the supply and demand are basically balanced. The data shows that the production and consumption of paper and paperboard increased from 107.1 million tons and 103.52 million tons in 2015 to 107.65 million tons and 107.04 million tons in 2019. It is expected that the production and consumption of paper and paperboard will continue to grow steadily in 2020 and 2021, and the supply and demand will be balanced

in fact, under the background of the rising price of upstream raw materials, the advantages of head paper enterprises have been highlighted. Large paper enterprises usually maintain pulp inventory for about 6 months. By adjusting inventory and financial hedging, large paper enterprises are often insensitive to the rise of pulp prices. Moreover, pulp and paper integrated enterprises such as Chenming Paper and sun paper can achieve full or partial self-sufficiency of pulp, which is less affected by the rise in pulp prices and has a higher cost advantage

taking sun paper as an example, the company is ahead of its peers in terms of cost control, raw material structure, energy consumption, investment cycle and cost in the field of cultural paper, and has built a cost advantage of up to 553 yuan/ton, realizing the lowest cost in the industry. This makes it possible to achieve a much higher level of profitability than its peers at the bottom of the cycle. Taking the bottom of the last two cycles of 2018qq1 and 2020q2 as an example, most of its peers were in the situation of losses or meager profits during this period, but the company could still deduct 330million and 380million non attributable net profits in a single quarter in 2019q1 and 2020q2, respectively

by the end of 2019, the pulp and paper production capacity has reached 6.82 million tons, and the overall scale ranks in the forefront of the industry. Around the paper industry chain, sun paper has been deeply cultivated for more than 20 years. Relying on the diversified layout, sun paper has developed steadily. At present, it has become a comprehensive leading paper enterprise in the industry. By the end of 2019, the company has a total pulp and paper production capacity of about 6.82 million tons, of which the paper production capacity is about 4.12 million tons (including 1.4 million tons of uncoated cultural paper, 700000 tons of coated paper, 1.6 million tons of kraft liner paper), and the pulp production capacity is about 2.7 million tons (including 900000 tons of chemical mechanical pulp and 800000 tons of dissolved pulp). The scale of pulp and paper production capacity ranks in the forefront of the industry as a whole

in terms of expansion, paper products can be mainly divided into three categories: cultural paper, packaging paper and household paper, among which white cardboard in packaging paper is the most prominent category. As a high-end packaging paper, white cardboard is mainly used in the fields of drugs, cosmetics, milk drinks, clothing and so on. The demand in these fields has maintained a growth of 7% - 9% in the past two years. Due to the joint action of environmental protection policies and regional economic transformation, the production capacity of 2.5 million tons of Whiteboard in Fuyang area of Hangzhou will be eliminated in 2020, and this part of market demand will be replaced by whiteboard, which will become an important development direction of the paper industry in the future

according to our statistics, Jinguang paper, Bohui paper, Chenming Paper and Taiyang paper are four white cardboard enterprises with annual production capacity of more than one million tons. It is worth noting that as the main manufacturer of white cardboard, Bohui paper has a white cardboard production capacity of 2.15 million tons in 2020, surpassing Chenming paper to become the second in the industry, second only to Jinguang paper. While golden light paper started the acquisition process of Bohui paper in 2019, and finally completed it by the end of September 2020, with a total shareholding of 48.84%. After the acquisition, the equity concentration of the company increased, which is conducive to improving the later operation and management and decision-making efficiency

according to public data, Bohui paper was founded in 1994 and listed on the Shanghai Stock Exchange in 2004. In, the company's revenue increased from 5.3 billion yuan to 9.7 billion yuan, and its CAGR reached 7.85%. Its performance has maintained steady growth for a long time. The production capacity of Bohui paper industry has also increased significantly in the past two years, and the total production capacity of machine-made paper has reached 3.7 million tons. In addition, the company has done a lot of work and investment in environmental protection. For example, it has introduced two world-class German paper production lines, reducing energy consumption by more than half. Environmental protection and efficiency are important practical measures in the transformation process of Bohui paper industry

however, some brokerage institutions believe that the market has strong expectations for the rise in paper prices in the near future, but from the perspective of inventory, order conditions and other indicators, the current signs of fundamental improvement are not obvious. In the face of the turbulent market in spring, we need to deal with it carefully. It is recommended to continue to pay attention to the implementation of the price rise of terminal paper products, downstream purchase willingness, order transactions and inventory removal. Among them, the leading paper mills have capital and technological advantages, and have invested in the construction of new raw material production bases. With sufficient self owned pulp production capacity, they are not afraid of the pressure of rising costs, but also increase the profit margin compared with small and medium-sized paper mills. In the future, the market share is expected to further concentrate on the system pressure: 21MPa

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