Paper prices keep falling

Paper prices keep falling
leading paper companies keep shutting down to deal with the backward production capacity of the industry, and the clearance of backward production capacity will be accelerated

According to the latest downtime plan announced by Nine Dragons Paper, the two major paper machines in the company’s Quanzhou base will be shut down for maintenance starting this week. Based on the design production capacity, it is estimated that the output of corrugated cardboard will be reduced by 15,000 tons. Before Quanzhou Nine Dragons issued the suspension letter this time, Dongguan Nine Dragons and Chongqing Nine Dragons had already carried out rotation shutdowns. It is expected that the two bases will reduce production by nearly 146,000 tons in February and March.chcolate box

Leading paper companies have taken measures to shut down, in response to the price of packaging paper, which is mainly corrugated paper, which has continued to fall since 2023.candle box

Zhuo Chuang Information analyst Xu Ling told the “Securities Daily” reporter that since the beginning of this year, on the one hand, the recovery of demand has not been as expected, and the impact of import policies has added to the contradiction between supply and demand in the market. On the other hand, the cost has also been declining. “From the price point of view, the price level of corrugated paper in 2023 will be the lowest in the past five years.” Xu Ling said that it is expected that the supply and demand of the corrugated paper market in 2023 will still be dominated by games.

01. The price hit a five-year low

Since 2023, the packaging paper market has been in constant decline, and the price of corrugated cardboard has continued to decline.

According to the monitoring data of Zhuo Chuang Information, as of March 8, the market price of AA grade corrugated paper in China was 3084 yuan/ton, which was 175 yuan/ton lower than the price at the end of 2022, a year-on-year decrease of 18.24%, which was the lowest price in the past five years.

“The price trend of corrugated paper this year is indeed different from previous years.” Xu Ling said, from 2018 to early March 2023, the price trend of corrugated paper, except that the price of corrugated paper in 2022 will be under the slow recovery of demand, and the price will fluctuate after a small increase. Moving outside, in other years, from January to early March, especially after the Spring Festival, the price of corrugated paper mostly showed a steady upward trend.
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“Generally after the Spring Festival, most paper mills have a price increase plan. On the one hand, it is to boost market confidence. On the other hand, the relationship between supply and demand has improved slightly after the Spring Festival.” Xu Ling introduced, and because there is also a process of logistics recovery after the festival, raw materials waste There is often a short-term shortage of paper, and the cost will increase, which will also provide some support for the price of corrugated paper.

However, since the beginning of this year, major enterprises in the industry have experienced a relatively rare situation of cutting prices and reducing production. For the reasons, the industry insiders and analysts interviewed by the reporter probably summed up three points.

The first is the adjustment of the tariff policy on imported paper. From January 1, 2023, the state will implement zero tariffs on recycled containerboard and corrugated base paper. Affected by this, the enthusiasm for domestic imports has increased. “The previous negative impact still stays on the policy side. Starting from late February, this year’s new orders of imported corrugated paper will gradually arrive in Hong Kong, and the game between domestic base paper and imported paper will become more and more obvious.” Xu Ling said that the impact of the previous policy side has gradually shifted to Fundamentally.
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The second is the slow recovery of demand. On this point, it actually differs from the feelings of many people. Mr. Feng, the person in charge of a packaging paper dealer in Jinan City, told the Securities Daily reporter, “Although it is obvious that the market is full of fireworks after the Spring Festival, judging from the stocking and order situation of downstream packaging factories, the recovery of demand has not reached the peak. Expected.” Mr Feng said. Xu Ling also said that although terminal consumption is gradually recovering after the festival, the overall recovery speed is relatively slow, and there are slight differences in regional recovery.

The third reason is that the price of waste paper continues to decline, and the support from the cost side has weakened. The person in charge of a waste paper recycling and packaging station in Shandong told reporters that the recycling price of waste paper has been falling slightly recently. ), in desperation, the packaging station can only significantly lower the recycling price.” The person in charge said.
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According to the monitoring data of Zhuo Chuang Information, as of March 8, the average price of the national waste yellow cardboard market was 1,576 yuan/ton, which was 343 yuan/ton lower than the price at the end of 2022, a year-on-year decrease of 29%, which was also the lowest in the past five years. The price is new low.