Recently we have received many price increase notices from paper mills, such as APP,BOHUI,SUN and so on.
So why paper mills increase prices now?
With the gradual improvement of the epidemic situation in 2023 and the introduction of a number of stimulus and subsidy policies in the field of consumption, the overall domestic economy is gradually recovering, the impact of the epidemic to speed up the recovery of consumer demand, the paper industry boom showed a rising trend at the bottom of the scale of demand will increase in the future, and the first half of the paper industry in 2023, production capacity, as well as the inventory can not keep up with the demand, resulting in demand exceed supply, and at the same time in the past two years, the paper industry is in a trough period, the price has basically bottomed out, the industry chain cost inversion phenomenon is prominent, the price is bound to rise.
In 2021, Ivory Board Paper, C2s Art Paper, offset paper prices were have a sharp rise, but it is affected by the sudden increase in market concentration, the price of Ivory Cardboard rose the most, the downstream industry resistance is also the strongest. And C2s Art Board, woodfree paper prices rose less than C1s Ivory Board, downstream industries also have resistance, but the mood is not as intense as the White Ivory Board market.
In 2022, the national economy was greatly impacted by the repeated impact of the epidemic. Due to the lack of social spending power, important downstream industries in the printing industry, such as cell phones, home appliances, cosmetics, and laptops, experienced a decline, which in turn affected the demand for packaging products and packaging paper.
Comparatively speaking, the book retail market also experienced a decline of more than 10% under the epidemic, but the market for primary and secondary school textbooks and teaching aids, which is the basic foundation of the publishing industry, remained stable, and coupled with the launch of some thematic publications, the demand situation faced by cultural paper was better than that of packaging paper, and its price was relatively firm.
Also, Art Card In Roll increase is behind the offset paper, partly may be due to: Gloss Art Board not only used in book publishing, but also used for business printing and some packaging products, the latter category of demand by the epidemic impact is greater.
In 2023, what is the trend in paper prices, it will affect by below 4 factors:
First, the subjective willingness of paper companies. Since the first half of 2021, paper prices peaked and fell back, paper companies are facing more and more pressure at the operating level, especially in 2022 by the long-term high pulp prices, paper companies have a strong impulse to raise prices, almost every one or two months will be issued a price increase letter. But, due to the demand downturn, except for offset paper , most of the price increase letter landing situation is not very satisfactory.
At present, it is certain that the paper company in 2022 was suppressed the urge to raise prices will continue to 2023, once there is the right time, paper companies will try to pull up the price of paper.
Second, the new paper production capacity situation. By the impact of paper prices before and after 2021, the paper industry set off a round of production and expansion of the boom, which in turn to white cardboard, offset paper for the most. Some reports show that in 2022, the new production capacity of C1s Ivory Board and woodfree paper are more than 1 million tons. If these capacities are all released in 2023, it will greatly affect the supply and demand relationship in the paper market, to a certain extent, inhibit the ability of paper companies to raise prices.
Third, the market demand for paper. With the continued optimization of prevention and control measures, the impact of the epidemic on socio-economic activities will undoubtedly become smaller and smaller as we enter 2023, and this uncertainty, which has affected various industries in the last three years, tends to disappear. With the normalization of socio-economic activities, the market demand for all types of printing and packaging products will undoubtedly see a resumption of growth, the publishing market is also expected to stabilize and rebound, these will increase the demand for paper products.
Therefore, from the demand side, 2022 may be a trough in the paper market, and 2023 to achieve bottoming out.
Fourth, the current position of paper prices. After nearly a year of differentiation,Ningbo Fold Paper prices are basically in recent years, the market is relatively low, Best C2s Art Sheet prices are basically in the normal range, the price of wood free paper is lower than the peak level of the current round of paper price increase cycle in 2021, but in the last three years, the relative high level.
Comprehensive view of the above four factors, after the market downturn in 2022, paper prices have accumulated a certain upward potential energy. 2023, the social economy with the epidemic situation improved rapid rebound, printing and packaging and publishing market stabilized and rebounded, paper prices upward potential energy will be transformed into the actual price increase in the action of paper companies.
Post time: Aug-01-2023