The continuous rise in the price of the hottest pu

2022-07-24
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The continuous rise in pulp prices may lead to changes in the competitive pattern of the paper industry

release date: Source: financial associated press

affected by the recovery of downstream demand and the RMB's rising power to break through the value of a batch of key new materials, since November 2020, the pulp price has continued to strengthen, and the futures market price has continued to rise. "In fact, the current pulp price is not very expensive. This round of rising pulp prices has not had much impact on most head paper enterprises. It can even be said that the advantages outweigh the disadvantages." Insiders told the financial associated press that the pulp price still has room to make up for the high point in 2017. In 2021, the pulp supply will remain stable, the demand will recover and the freight will rise. It is expected that the pulp price will continue to show an upward trend in the short term

"this will cause changes in the competitive landscape of the industry." An industry analyst told the financial associated press that under the continuous rise of pulp price, on the one hand, affected by the rise of production costs, more industrial capital will be invested in the pulp production field; On the other hand, with the rise of pulp price, the profit space of small and medium-sized paper enterprises will be further compressed. The low-end production capacity of the paper industry will be cleared by the Undertaker: Hunan Academy of Forestry Sciences, and the production capacity will be concentrated in the leading enterprises

driven by multiple factors, pulp prices continue to rise

according to different 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 paper types use different types of pulp. Wood pulp is mainly used for double offset paper, coated paper, white card paper, household paper and special paper, while waste pulp is mainly used for packaging paper, box board paper and paper

wind data shows that as of last week, the average weekly spot prices of coniferous pulp and broad-leaved pulp were 5150/ton and 4100/ton respectively, and the increase in December was 13.9% and 17.1% respectively, up 825/ton and 600/ton respectively compared with the lowest price in the whole year

in the futures market, the main pulp market in Shanghai commodity futures market increased by more than 20% in a single month in December alone. As of January 6, 2021, the main contract reached 5960/ton, a new high since its listing

according to the analysis of many industry insiders, the recovery of downstream demand and low relative valuation are the main reasons for the strength of pulp prices. In addition, the zero import of waste paper from January 1, the continuous appreciation of the RMB and the rise in shipping costs are also one of the driving factors for the rise in pulp prices

in terms of pulp supply and demand, the global pulp supply will be basically stable in 2020, while the prosperity of downstream paper industry will start to rise in the second half of 2020. According to the latest data of pppc, the global output of needle pulp in 2020 is expected to be 27.985 million tons, a year-on-year decrease of 2%, while the global output of broad-leaved pulp in 2020 is expected to be 37.985 million tons, a year-on-year increase of only about 0.2%. At the same time, the supply pattern of the wood pulp industry is relatively centralized, the concentration of large overseas pulp enterprises has increased, and the price voice is strong. The pulp price can be controlled by controlling the speed of production capacity

the benefit logic of downstream paper enterprises

according to the announcements of Listed Companies in the paper industry, raw materials based on pulp account for more than 70% of the cost of each paper type, and some paper types even account for 85%. So, why does the continuous rise of pulp prices outweigh the disadvantages for leading paper enterprises

insiders told the financial associated press that large paper enterprises such as sun paper usually maintain pulp inventory for about 6 months. By adjusting inventory and financial hedging, large paper enterprises are often not very sensitive to the rise of pulp prices

at the same time, large enterprises integrating pulp and paper, such as Chenming Paper and Taiyang paper, can be fully or partially self-sufficient in pulp. They are less affected by the rise in pulp prices and have higher cost advantages. According to the sun paper research report issued by Orient Securities, the cost of cultural paper of sun paper is 553 per ton lower than the average cost of the same industry due to its own pulp production capacity and high cost control level

however, small factories are different. Limited by capital and scale, small factories can only choose to purchase cash for production. The price of pulp continues to rise, resulting in a shortage of funds, raw materials and customer loss. It is reported that at present, the survival of small factories has been very difficult. Many small factories have taken the initiative to seek acquisitions or declared bankruptcy, and the low-end production capacity of the industry is accelerating to be cleared

the leading enterprises are actively taking up the position. In 2020, many enterprises in the paper industry launched new paper production capacity or launched expansion plans

industry barriers appear, leading paper enterprises have launched pulp production capacity

it is expected that pulp production capacity will become a medium and long-term competitive barrier in the paper industry. Therefore, major paper enterprises have launched pulp production capacity. According to the statistics of zhuochuang information, China's new pulp production capacity in 2021 and beyond accounted for about 52% of the global new pulp production capacity

the associated press of Finance combed the public data and found that since 2019, almost all large domestic pulp and paper enterprises, including nine dragons paper, Liwen paper, Asia Pacific Senbo, Chenming and Taiyang, have launched plans to increase their pulp production capacity, with a total of nearly 20million tons. At the same time, Shanying international, Liwen, nine dragons, sun and other giants all choose to layout pulp production capacity in Southeast Asia closer to the origin of wood chip raw materials or overseas ports. Industry analysts believe that the new pulp production capacity of various paper enterprises will be put into operation one after another. Large domestic paper enterprises will obtain low-cost pulp and their profitability will be further enhanced

Chenming, Taiyang and Bohui, which have the integrated production mode of Forest Pulp and paper, have lower cost advantages

it is reported that Chenming paper has the largest pulp production capacity in China, and the current self-made pulp production capacity has been matched with its own paper production capacity. At the same time, its Huanggang Forest Pulp and paper integration phase II project was commenced in december2020, with a new annual pulp production capacity of about 1.05 million tons; Sun paper's Forest Pulp Paper Series in Laos and Beihai, Guangxi Province covers various molecular weight projects ranging from 300 kDa (particle/powder) to 700 kDa (highly active powder). After the project is put into operation, it will greatly improve the self-sufficiency rate of pulp of the company, which is characterized by low noise, no oil pollution and flexible use; Bohui paper has a pulp production capacity of about 800000 tons/year. With the ownership of APP group, the company may obtain higher quality wood pulp and enjoy rich cost dividends through the upstream forest land of app and abundant raw material resources at home and abroad

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