China Paper Industry Situation Forecast in 2014: Struggling

In 2013, the steady development of the paper industry in China still had many or many problems. Market demand was softening, apparent consumption was declining, production growth slowed, and corporate profitability narrowed. Combined with the current environment of the overall economy, it can be predicted that the paper industry in China in 2014 is still a difficult year.

Market demand softening

In 2013, the world economy is undergoing profound adjustments and the recovery of the global economy is difficult. The slowdown in the domestic macroeconomic growth and the “three carriages” that drive economic growth have all declined to varying degrees. Plus, governments at all levels have stepped up energy conservation and emission reductions and eliminated backwardness. Therefore, they are bound to rely on raw materials. Type pulp and paper industry has an impact.

Under the influence of the international financial crisis, global demand was insufficient and growth was sluggish. As a result, China’s exports have dropped significantly. In particular, negative growth in exports occurred in September 2013, and paper and paperboard as supporting products such as export goods packaging have reduced demand. .

Affected by such factors as slowing market demand, declining production volume and cost factors, the import growth of paper pulp and waste paper for papermaking production will decline, and the import volume will decline.

Relevant data show that in 2013, the production and operation of the papermaking and paper products industry were basically stable, but they still did not emerge from the predicament. The irrationality of the product structure and production scale of the paper-making enterprises has caused problems such as the structural and staged surplus of some products.

Specific performance has the following problems: First, the growth of paper and board production has slowed down, and consumption has declined. Second, the production and operation of pulping companies are still in difficulties; Third, the net amount of accounts receivable has increased; Fourth, the number of companies that have suffered losses. And the amount of losses increased.

The following focuses on analyzing the production and consumption forecast of major varieties of paper and board.

Newsprint: According to the analysis of the current production capacity of domestic newsprint, the production and sales in the first few months of 2013, and the analysis of the publishing volume of newspapers this year, it is estimated that the production volume of newsprint in 2013 will fall by approximately 3% from the previous year. Total consumption is expected to decline by about 4.5% year-on-year.

Books, papers and papers: From the current situation, there are few domestic large-scale new construction and renovation and expansion projects in 2013 for uncoated printing and writing papers, and the elimination of backward production capacity involves a small part of capacity reduction and production. It is not expected to cover all of 2013. Cloth printing and writing paper decreased by approximately 2.2% over the previous year. The annual consumption was approximately 16.1 million tons, a decrease of approximately 4.4%.

Coated paper: Coated paper is a kind of fast-growing domestic production capacity in recent years, and its production capacity has exceeded 8 million tons. With the improvement of quality and the development of color printing, the consumption of domestic coated paper is also rising. At the same time, the export volume is also increasing, while the import volume is decreasing. Because of this, many countries and regions have imposed restrictions on China’s export of coated paper, which is currently the product that has suffered or is experiencing the most anti-dumping and countervailing investigations. Due to the obstruction of exports, the increase in domestic consumption has also slowed down, resulting in fierce competition in the domestic market. In 2013, due to the impact of the economic environment, it is expected that the domestic production volume of coated paper in 2013 will be the same as or slightly lower than that of the previous year. The volume is basically the same as or slightly higher than the previous year.

Tissue paper: With the economic development and improvement of living standards, people have more and more demands for the use and types of tissue paper, which has led to the rapid development of domestic tissue paper. In the past two years, many household paper production and re-build projects were planned and the new production capacity was close to 2 million tons. Due to the rapid expansion of production capacity and the unbalanced regional structure, the market expects a negative rise and the competition will intensify.

The majority of household paper products are disposable products. Except for the specific requirements for hygienic safety, and the use of waste pulp as the raw material, no products such as sanitary toilet paper, kitchen wiping paper, and paper towel for toilet use are required to be manufactured using raw wood pulp. Using waste pulp can meet quality and hygiene requirements. What kind of raw materials to choose, what kind of equipment should look at the product market and consumer group positioning, do not necessarily follow suit, pay attention to differentiation and marketable.

White paperboard: The white paperboard market was relatively stable in 2013, with few new production capacity. Due to the impact of the economic environment, energy saving and emission reduction, and elimination of backward production capacity, some enterprises in some regions have shut down or reduced production, making whiteboard production. Decrease. According to the production of white cardboard in 2013 and the reduction of production and production of some small and medium-sized enterprises, as well as the import and export of white cardboard and white cardboard this year, it is expected that the annual production of domestic whiteboard will decline by about 3% in 2013, and the year-on-year 5%.

Boxboard and corrugated paper: Affected by the economic environment, especially the slowdown in the export growth of various commodities in China, the impact on packaging paper as an accessory for export products has increased, resulting in weakened market demand and fierce competition. It is understood that in 2013, the cardboard and corrugated paper stock market was dominated by quality and price factors. Large and medium-sized production enterprises had obvious advantages, production and sales were basically stable or increased, and some small and medium-sized enterprises had more difficulties, coupled with energy-saving emission reduction and elimination of backward production capacity. More efforts have been made to reduce production or stop production of this part of the company, and production and sales are not stable.

Growth continues to slow

According to the current international and domestic economic development situation, combined with the paper industry production and the domestic and international paper market trends, the author believes that the domestic paper industry production and market in 2014 will generally show the following trends:

First, the growth of paper and paperboard consumption and production will continue to slow down. As the economic environment has not fundamentally improved and the demand growth has slowed down, it will be difficult to effectively improve in the short term, and it is difficult for the industry to recover quickly. If the macroeconomic situation does not change much, we believe that the growth in domestic paper and board production and consumption in 2014 will follow the trend this year and continue to ease.

Second, the market competition has intensified and the profit space has narrowed. Due to economic growth and slowing market demand, some products will be phased in surplus, which will intensify the competition in the paper product market. In addition, factors such as the rise of major production factors of enterprises will be squeezed into the profitability space of enterprises, and enterprises with difficult production and operation will increase.

Third, most product market prices will operate at a low level, and the latter stage is expected to stabilize and pick up. The paper industry faced a slowdown in market demand and structural and phased overcapacity pressure this year. The market price trend of most paper and paperboard products was basically high and low, and the overall operation was at a low level. According to the recent economic data released by the National Bureau of Statistics, the domestic macroeconomic level has shown signs of stabilization and recovery. The Third Plenary Session of the 18th National Congress held in early November 2013 formulated various reform goals. With the implementation of various measures, the domestic economic situation It is bound to be good and is expected to stimulate and boost the market. It is expected that the performance of the paper and paperboard market will be low and high.

Fourth, the international trade friction has increased and the export of paper products has been blocked. Due to the global economic downturn, trade protection in various countries has risen, and the total production of paper and board in China has increased, and the quality of products and varieties have increased. Exports have been increasing year by year, while the traditional paper manufacturers in the world have increased the export of paper products in China. It is on the verge of enemies that they have taken restrictive measures to set barriers and limit the export of paper products in China. At present, paper products are the country with the largest number of cases in China's export commodities suffered or being subjected to anti-dumping and anti-subsidy investigations. Domestic paper-making enterprises should also adapt to the changes in the situation. All involved enterprises should actively face it and they should not voluntarily give up their rights and interests.

5. The pressure on energy conservation, emission reduction and environmental protection of enterprises has been further increased. In 2013, the Ministry of Industry and Information Technology released two lists of companies that eliminated backward production capacity in the industrial sector. Among them, the papermaking industry involved a large number of companies, with a total of 341 in two batches, of which 67 of the second list of eliminated backward companies were all papermaking companies. The country’s overall environmental protection policies have become stricter. In addition to the original COD and BOD indicators, the control of papermaking production has increased the ammonia nitrogen requirements and the boiler denitrification requirements. At present, a considerable number of companies are still unable to meet the requirements of the new environmental protection standards. Still need to increase investment, leading to further increase in production and operating costs, and further increase the pressure.

6. The company will seek transformation and explore the development of extension services will accelerate. Faced with the predicament of weak main business and difficult profitability, papermaking enterprises will increase internal governance on the one hand to reduce costs, and there will be more companies with desires and mergers and reorganizations. On the other hand, they will voluntarily seek to change the water industry. Business, in order to increase profitability, will increase.

The appearance of a difficult situation can also be understood as a prelude to an outbreak on a certain level. In 2014, while China's papermaking industry was struggling, it may be viewed in another light, that is, actively adjusting the industrial structure and enhancing innovation capabilities to transform the industry. Ways to grow, so that we can usher in the spring of development.

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