Analysis on the rise and fall of base paper before

2022-08-24
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Analysis of the rise and fall of base paper before the Spring Festival

the current paper market has returned to the buyer's market, and several leading paper enterprises jointly rose. The average import price in January 2016 was 6779.8 yuan/ton, which may not be able to pry such a depressed market. If demand does not pick up substantially, the trend that paper prices are easy to fall but difficult to rise will not change

although the supply and demand side of the paper packaging industry continued to deteriorate, and the production off-season of the Spring Festival holiday came as scheduled, the last wave of price rise before the Spring Festival hit again after repeated rises in the price of packaging paper

after the first day, the news of the rise in the price of base paper seemed to be unstoppable, and all kinds of paper varieties shouted up, with a maximum increase of 300/ton. At the same time, the downstream cardboard factory also followed up in time

where is the support for the price rise of paper mills

throughout 2018, except for a small rise in early May, the rises in other months were not implemented, and the paper price fell steadily. In 2019, the continuous decline in market demand is inevitable, but as soon as the upstream paper mills start and forge ahead, it seems that they are bound to win the price rise

the price trend of all kinds of base paper in the past two years

then, what is the confidence of the paper mill to increase prices

first, the inventory of downstream packaging and printing enterprises is generally at a low level, and then they will face a long Spring Festival holiday. Therefore, there is a rigid demand to replenish inventory in the downstream

second, after long Evonik expands the production capacity of biomaterials, the pressure on base paper inventory will slow down after the huge time and large-scale downtime in the future medical market. At the same time, paper enterprises also need to raise prices to make up for the losses caused by insufficient production capacity

third, the central bank released 1.5 trillion liquidity through the reduction of reserve requirements, making it less difficult for packaging and printing enterprises to obtain financing, and objectively there are more capital reserves. The RRR reduction will increase inflation expectations and further push up the motivation for the rise in the price of base paper

fourth, a large number of new production capacity will be put into operation in 2019, further worsening the supply and demand situation. After the production capacity increases, the paper price is more difficult to improve. As the senior management of a leading domestic paper enterprise said, many paper direct enterprises hope to raise prices, so as to lay the foundation for 2019

why is the paper price easy to fall but difficult to rise

the market response to the recent wave of price increases is still very flat, and even such articles are too lazy to be concerned. The concept that paper prices are difficult to rise and easy to fall has been deeply rooted in the hearts of the people. Compared with the beginning of 2018, the hot packaging paper market has plummeted through language programming

the reasons are as follows:

1. Although the second half of 2018 is the traditional peak season of packaging paper demand, this year due to the reduction of export orders, coupled with the unsatisfactory shipment volume of the Mid Autumn Festival, national day, double 11 and other festivals, packaging and printing enterprises dare not import a large amount of paper under the continuous bad market

2. According to the Sino US trade statistics, the export orders to the United States in 2019 were seriously overdrawn in the second half of 2018. However, the peak order season in 2018 was unexpectedly bleak, indicating that domestic demand was weaker than expected. The correlation between the two means that the demand will continue to increase inversely in the first half of 2019, which further strengthens the determination of downstream customers to stick to low inventory positions

3. In the second half of last year, the oil price plummeted, the pulp fell steadily, and the exchange rate was stable. From the perspective of cost factors, there was no incentive for the base paper to rise in price

4. Judging from the current macroeconomic situation, as the increased liquidity enters the field of infrastructure, it is not conducive to stimulating residents' consumption, but will dilute residents' purchasing power. In the situation of oversupply, paper mills have lost their pricing power

therefore, based on the above points, the current paper market has returned to the buyer's market, and the joint price rise of several leading paper enterprises may not be able to pry such a depressed market. If demand does not pick up substantially, the trend that paper prices are easy to fall but difficult to rise will not change

then, according to the above logic, will the paper price return to the platform period of, and will the paper price be fixed in a long-term parallel situation? I'm afraid it's hard! The reason is that the internal and external environment of the paper market is uncertain, the internal supply-demand balance is deteriorated due to the increase of production capacity, and the external trend is changed due to factors such as monetary policy and exports

the paper price in 2019 is likely to be more volatile than that in 2018. Packaging and printing people need to pay close attention to the following points: 1) exchange rate fluctuations, especially policy adjustments; 2) The adjustment of monetary policy and the continuous reduction of interest rates and reserve requirements seem inevitable; 3) Sino US trade, Sino European trade and Sino Japanese trade situation; 4) National tax, social security and environmental protection policies

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