The hottest development trend and market prospect

2022-07-25
  • Detail

Analysis on the development trend and market prospect of China's paper industry in 2018

release date: Source: China industry information editor: Yu Jia Views: 2905 copyright and disclaimer

core tip: the paper sector performed well in 2017. As the industry has been at a low profit point for a long time, the supply side reform led to a reduction in production capacity, a sharp rise in paper prices in the middle of the year, which led to a collective improvement in the performance of paper enterprises and a collective upward movement in the paper sector. As of December 25, the paper sector as a whole rose by 0.17%, which is the sub sector of the light industry manufacturing sector with the highest increase this year. In the first three quarters of this year, the operating revenue of the paper sector reached 89.78 billion yuan, an increase of 32.55%, and the net profit reached 8.429 billion yuan, with a growth rate of 172.72%

2017 saw an eye-catching performance in the paper sector. As the industry has been at a low profit point for a long time, the supply side reform has led to a reduction in production capacity and a sharp rise in the price of paper in the middle of the year, which has led to a collective improvement in the performance of paper enterprises and a collective rise in the paper sector. As of December 25, the paper sector as a whole rose by 0.17%, which is the sub sector of the light industry manufacturing sector with the highest increase this year. In the first three quarters of this year, the operating revenue of the paper sector reached 89.78 billion yuan, an increase of 32.55%, and the net profit reached 8.429 billion yuan, with a growth rate of 172.72%

the paper sector rose by 0.17%

data source: public data collation

the P/E ratio of the paper sector

data source: public data collation

the operating revenue of the paper sector (million yuan)

data source: public data collation

the net profit of the paper sector (million yuan)

the paper supply side continued to tighten in 2017, which ran through the first three quarters of 2017, Corresponding to the continuous rise of paper prices and the repair of plate profits. In 2017, the return on net assets of Q3 paper industry was 9.53%, out of the long-term downturn from 2011 to 2015, and the roe level returned to the historical high in 2007

historical roe of papermaking sector

data source: public data collation

. On the one hand, the environmental protection policy became stricter, and the pollutant discharge permit began to be implemented. The Ministry of environmental protection issued the notice on the management of elevated source pollutant discharge permit in thermal power, paper industry and pilot cities in Beijing, Tianjin and Hebei. All paper-making enterprises must have a permit to discharge pollutants. The strict implementation of environmental protection policies makes enterprises face strict environmental protection supervision. Small and medium-sized enterprises are affected by the increase of environmental protection costs, their production costs are raised, their profits are compressed, and their living space is squeezed. By linking the emission limit with the production capacity, enterprises are more cautious in expanding production, making it more difficult to expand production capacity. On the other hand, the Ministry of environmental protection officially issued the environmental protection control standard for the import of solid wastes that can be used as raw materials (Exposure Draft), which restricted the import quota of foreign wastes, leading to a sharp rise in national wastes, and further driving up the price of corrugated paper for downstream boxes

II. Price trend of the paper industry

1. Since the second half of 2016, the price of wood pulp has continued to rise, with an unprecedented increase. The price of pulp throughout the year has continued to rise. The price of needle leaf pulp has risen by 31.15% year to date, and the price of broad leaf pulp has risen by 49.09%. The rising pulp price drives the strength of the wood pulp industry chain. We believe that in 2018, the pulp price will maintain a high level. In 2018, the supply side of wood pulp will have new production capacity, and Chenming paper will have a production capacity of 1.2 million tons. On the demand side, it is mainly the increase of China's market demand. There is no environmental protection restriction on the import of wood pulp, and the price is less affected by the policy. With the continuous arrival of overseas wood pulp in Hong Kong, there is pressure on the domestic pulp price to continue to rise. It is expected that the supply-demand ratio of pulp will continue to maintain a balance, the pulp price will remain high, and the enterprise cost will not continue to rise significantly

pulp price trend (USD/ton)

data source: public data collection

2. The 600000 ton white cardboard production capacity of Zhonghua paper in Beilun, Ningbo will be moved to Indonesia in 2018. Based on the production capacity of 10.34 million tons in 2017, the production capacity is expected to shrink by 5.8% in 2018. The demand side is mainly reflected in the substitution of whiteboard. Hangzhou Fuyang is the main production area of white board paper, with an annual production capacity of 7million tons. According to a recent local plan, all production capacity will be gradually vacated and retired by the end of 2019. In the process of transferring these production capacity, small and medium-sized production capacity will be eliminated due to environmental protection requirements. Therefore, under the situation of shrinking supply of white board paper, white board paper with better performance and slightly higher price will play a certain role in substitution, and some demand will turn to white board paper. It is expected that in 2018, the white cardboard will continue to maintain a tight supply and demand pattern. In the absence of new capacity, the demand side will continue to increase. It is expected that the white cardboard price will maintain an upward trend

price trend of white cardboard (Shandong Bohui: 250g) (yuan/ton)

data source: public data collection

3. The concentration of coated paper industry is very high, with Cr4 exceeding 90%, in an oligopoly situation. The demand pattern is stable. It is expected to maintain the current state, and the possibility of substantial growth is low. The market of the sector is mainly driven by the large market of the paper sector. The rise in the price of raw materials drives the rise in the price of paper. The oligopoly market pattern makes it unlikely that there will be fierce competition in the industry. It is expected that the current pattern will continue

price trend of coated paper (Beijing Dongfan: 105g) (yuan/ton)

data source: public data collection

4. Double offset paper is mainly used for the printing of books and teaching materials, showing obvious seasonal demand. Two to three months before the start of school in spring and autumn, the demand usually increases due to the printing of teaching materials, but the overall demand is relatively stable. Due to the low entry threshold and concentration of the industry, even if raw materials rise, the synergy among enterprises is poor, and the elasticity of industry performance is general

price trend of double offset paper (Beijing upm:g) (yuan/ton)

data source: public data collection

5. Household paper refers to all kinds of sanitary wiping paper used to take care of individuals at home and abroad, including roll toilet paper, extraction toilet paper, boxed facial paper, pocket facial paper, handkerchief paper, napkin, kitchen paper, wet wipes, etc. As a paper product that is most closely related to people's daily life, household paper has strong demand rigidity. In 2016, China's consumption of 85 tons was matched with 40000 tons of special automatic centering devices, an increase of 4.53% over the previous year. From 2007 to 2016, the average annual growth rate of production was 6.54%, and the average annual growth rate of consumption was 6.71%. The market scale of domestic household paper increased from 45.370 billion yuan in 2009 to 881.70 yuan in 2015, with an annual compound growth rate of 11.71%. According to this growth rate, the overall market scale is expected to reach 150billion yuan by 2020

market scale of household paper (RMB 100 million)

data source: public data collation

at present, the per capita household paper in China is less than 6 kilograms, which is the successful transformation of Yulian groups, Japan and South Korea are kilograms, Hong Kong and Taiwan are more than 10 kilograms, and Europe and the United States are 30 kilograms. From 2007 to 2015, the annual compound increase of the per capita household paper volume in China. The growth rate of finding problems with Brinell hardness tester is 8.53%. According to this growth rate, it is expected that the per capita household paper volume in China will reach 7.83kg by 2020

China's per capita household paper consumption (kg)

data source: public data collection

according to the report "status and development trend of China's household paper industry" released by the household paper professional committee of China Paper Association in May 2015, the total share of the top 15 enterprises is about 50%, and the total market share of the top four leading enterprises is about 35%, while that of foreign countries is basically more than 60%, There is still much room to improve the domestic market concentration. Under the background of relative overcapacity in the industry and stricter environmental inventory, leading enterprises will obtain opportunities for sustainable development by squeezing the development space of small and medium-sized enterprises. With the improvement of consumers' requirements for healthy life, they are also more picky about product quality and brand selection. Leading enterprises, with their first-class technical equipment, high-quality product production and leading marketing measures, are expected to meet the multi-level and differentiated product needs of the market and obtain a higher market share

III. price trend of waste paper

in 2017, China strictly restricted the import of foreign waste, restricted the import quota, restricted the issuance of import license, and tightened the standards for impurities in waste paper (the impurity content did not exceed 3 ‰), which led to the continuous rise of the price of domestic waste and the inversion of the prices of foreign waste and domestic waste. After the national day of 2017, the price of domestic waste paper fell by a large margin, from nearly 3000 yuan/ton to 1750 yuan/ton. The price once returned to the level before the sharp rise of national waste in June. There are two main reasons for price fluctuation. One is that the "double 11" stock demand is over, and the Spring Festival is too early, so there is a short off-season at the demand side. The other is that the waste paper has increased greatly in the early stage, and some enterprises have high inventories. At the end of the year, due to the demand for cash return, there is a certain pressure on the supply side to reduce prices and ship goods

national waste: yellow paperboard Fujian class A (yuan/ton)

data source: public data collation

American waste 3y (USD/ton)

data source: public data collation

however, with the recent introduction of a series of policies on the import of foreign waste next year, the impurity content standard and import quota of foreign waste will be more stringent, and the import of waste paper of paper enterprises below 50000 tons will be restricted, The import volume of waste paper is expected to decrease in 2018. This standard specifies the product classification, technical requirements, test methods, inspection rules, product certificate, stacking and transportation of autoclaved lime sand brick (hereinafter referred to as lime sand brick), accounting for 20% of the total import volume of waste paper in 2017. There is an obvious gap at the supply end. Against the background of tighter import of foreign waste, we believe that the price of domestic waste is expected to stabilize and benefit the waste paper industry chain. From the perspective of concentration, there is still room for further integration of packaging paper. From 2016 to 2017, the improvement of environmental protection and production restriction became the catalyst to speed up the industry's capacity reduction and the adjustment of supply and demand structure. A large number of small and medium-sized paper production capacity that failed to meet the environmental protection standards were permanently shut down, and the clearing of excess capacity was accelerated. It is expected that the market share will further concentrate on the industry leaders in the future

IV. the demand for paper continues to decline

paper is mainly used for the production of newspapers and periodicals. The demand side is affected by the continued weakness of the paper media, and the demand for paper has decreased significantly. In addition to the rigid demand of some party newspapers, the paper demand of other living and financial media has been declining. The decline in demand has led to the low profit margin of the industry, the elimination of backward production capacity, the gradual occupation of the market by leading enterprises, and the bargaining power of high-quality enterprises is expected to improve. At present, Huatai Co., Ltd. is the largest paper supplier in China, with an annual production capacity of 700000 tons

average unit price of paper export (USD/ton)

data source: public data collation

v. the market of box board corrugated paper is expected to continue to rise

box board corrugated paper is a multi-layer adhesive, which is composed of at least one layer of corrugated core paper interlayer (corrugated paper) and one layer of paperboard (box board paper). It has high mechanical strength, can withstand the collision and fall during handling, and is widely used in paper packaging. With the acceleration of supply side reform, the capacity removal of box board corrugated paper has been accelerated, and the import policy of foreign waste has become stricter, resulting in the reduction of foreign waste supply. In 2018, the ban on foreign waste will continue to maintain high pressure, the import amount of foreign waste will continue to decrease, and the capacity of box board corrugated paper may continue to shrink. Box board corrugated paper is the main material of paper packaging. With the rapid development of e-commerce and other industries in China, the demand for paper packaging shows a continuous upward trend

corrugated paper price (yuan/ton)

data source: public data sorting

carton board price (yuan/ton)

data

Copyright © 2011 JIN SHI