Source: Shen Wan Hongyuan, carton industry, carton micro-vision finishing editor
In February, the price of raw paper and paperboard increased frequently. According to incomplete statistics, the price increase letter has reached 74 in the past half-month. The current industry has not fully entered the sales season. Why does the industry frequently raise price letters? Shen Wan Hongyuan has three reasons for analysis.
Where does the paper industry vie for the price increase?
In February, the price of raw paper and paperboard increased frequently. According to the incomplete statistics of the carton micro-vision, the price increase letter has reached 74 in the past half-month, and the paper industry leader Xiaolong said at the performance conference a few days ago. The price of Nine Dragons has risen by 50-100. The current price of finished paper is still low compared with the cost. Therefore, according to the trend of finished paper and raw materials, there should be a 200 increase in finished paper from now on.
Then, during the period after the year, when the sales season is not fully entered, why is the industry frequently raising price letters?
There are three reasons for Shen Wanhong’s analysis.
1. After the holiday, the price increase will be carried out in an intensive manner.
After the Spring Festival, dealers and downstream printing factories replenish stocks, and in March each year, the publishing house invites tenders for autumn textbooks. Cultural papers ushered in the spring season, and routinely raise prices after the festival.
The first round of price increase letters: double-adhesive paper, coated paper price increase, double-adhesive paper partially landed. From mid-January, double-adhesive paper and coated paper were intensively released in February, and the price increase was 200/ton and 100/ton respectively. Up to now, the double-adhesive paper has basically landed 50-150/ton, but the price of coated paper has been raised. Not landing.
The second round of price increase letters: coated paper and white cardboard have been sent to raise the price, the extent of landing remains to be seen.
After the festival, the paper and paper enterprises again intensively released the letter of paper and white cardboard in March, raising the price by 200/ton, and it is expected that the double-adhesive paper will also issue a new round of price increase letters at the end of February. As the new production capacity of Chenming Paper is still low, the new capacity of Bohui White Cardboard will also be put into operation, and the price of paper will still need to be tracked.
2. The profit bottomed out, and the bottom of the economy brought the earnings to stabilize expectations.
In January 2019, affected by the bottom of the finished paper price + high-priced pulp inventory, the profit of tons of paper reached the bottom. With the price increase of finished paper in February, the high-priced pulp was digested and the profit of the paper mill was gradually restored. However, the recent round of quotations from overseas pulp mills has been raised, and the price of pulp has risen. The follow-up still needs to pay attention to the impact of the difference between the increase in finished paper and pulp on the profit per ton.
3. Liquidity improved, market sentiment rebounded, and cyclical products rose.
Due to the increase in counter-cyclical adjustments by macroeconomic regulation and control and the marginal improvement in the transmission of monetary policy, new credit and social and financial exchanges in January both set a new record high, M2 growth rate stabilized and rebounded, and the cyclical product sector rose. After 2018, the stock price fell sharply. The PB valuation of the papermaking sector is close to the bottom of the history. At the end of January, the industry index PB fell to 1.05 times, the lowest 1% percentile in history. As the overall market sentiment warmed up, the valuation gradually recovered.
The second and third level factories are the community of destiny. How to break the game is the key
Under the price hike atmosphere, the paper mills have relied on the industry's priority to capture most of the profits of the industrial chain, leaving only the second and third-tier factories with margins. The price of paper rose, the second-grade factory was smooth, and the third-level factory complained; the paper price fell, and the second-level factory “cut the meat to feed the eagle†and the third-level factory to observe the change.
To put it bluntly, the second and third-level factories are two closely connected processes in the community of destiny.
Since it is a community of destiny, it should not be viewed from a different perspective. If the second and third-level factories can't sit together to drink tea, talk about cooperation, talk about integration, they can't restore the state of the entire industry chain.
The second and third-level factories must have the courage to break the deadlock, and each of them will give full play to the advantages of production and sales, and further integrate the mode of production and sales, in order to break the hope.
Editor in charge: Xia Jing
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