Source: Carton says
The price of paper has risen again! Recently, the price of raw paper and waste paper has risen again. Major paper companies such as Shanying Paper, Chenming Paper, and Bohui Paper have raised the recycling price of waste paper, and announced that the price of raw paper will be adjusted online. The price increase is 200/ton.
Reasons for price increases:
The cost of materials has gone up, that is, the price of waste paper is high.
Profits have fallen, and the decline is because the selling price has dropped.
Waste paper has once again become a back pot man. Everyone knows that the purchase price of waste paper is in the hands of paper mills. The first step in price hikes is naturally to raise the price of high waste paper. It is impossible to create a waste paper price increase. What is the price of the original paper?
The decline in profits is a relative figure. Compared with the abnormal profit rate of 17 years, the net profit rate of the paper industry, which is made by traditional industries, has reached 15%. Now the profit rate will rise back. It’s not that I didn’t make it. I really don’t want to earn less.
Price increase has nothing to do with supply and demand
The current price increase is not in short supply, but the paper market has further reduced profit margins due to environmental protection and raw materials. The major paper companies can only raise prices to protect profits. An executive of a listed paper company said in an interview that the price of raw paper has spread to downstream paperboard factories, and the bargaining power of paperboard factories is weak, and only passive price increases can be made. In the future, paper companies may extend their business to downstream paperboard factories. Improve the industrial chain to increase profits.
Interpretation:
1. The price increase has nothing to do with supply and demand. The increase in cost is a rigid reason. But look at the raw materials in the cost is the paper industry itself rose, the environmental factors are not in existence in 19 years.
2, eat the downstream bargaining power is weak, the short-term appeal of price increases is to continue to achieve high profits, long-term appeal is to extend the industrial chain to make a layout is to rush to the downstream orders, the exclusive consumption of rice to earn one person.
Waste paper is a price increase
"The big factor behind this round of price increases is that the price of waste paper keeps rising and the market price rises. The paper enterprises push the price of the original paper to be adjusted online. There will be more manufacturers to follow up." Paper company executives told reporters that domestic waste paper prices The rise originated from the implementation of the domestic ban on foreign waste import policy.
Interpretation: To completely waste paper into the "chess" of the paper industry, the absurd remarks that lead to the waste price increase of the country just want to pull the plateau paper. The reduction of waste is not the real cause of the shortage of raw materials, the demand falls and Uncontrolled expansion of production capacity is the core of the relative shortage of raw materials.
Maintaining a high profit level of 17 years is the real purpose of price increases.
Recently, major paper companies have successively released performance forecasts, and most companies expect a decline in earnings in 2018. On February 1, Nine Dragons Paper announced that for the six months ended December 31, 2018, the profit attributable to equity holders of the company is expected to be no less than 2.4 billion, a decrease of about 45% from the same period in 2017. 1.95 billion.
As for the reason for the decline in profits, Nine Dragons Paper said that it was mainly due to the rise in raw material prices and the decline in the price of products. As early as January 2019, the Goldman Sachs Group released a report saying that the view on the Chinese paper sector turned to prudence. It is expected that the supply and demand of cardboard paper will be greatly deteriorated, and the ratings of Nine Dragons Paper and Lee & Man Paper will be lowered.
Interpretation: No matter how the upstream paper mill wants to push the price up and maintain its long-term existence, it still circumvents the fundamental problem of the deterioration of demand reduction. If the demand does not reduce the capacity, the price increase will always be a false proposition.
Price increase is not sustainable
“With the continuous release of production capacity, the demand-side market has started to weaken since October 2018, consumption in the domestic market has declined, and prices have declined due to falling demand.†Paper company executives told reporters that real estate, automobiles, etc. from 2018 The real economy driving the packaging paper industry has declined, and the overall economic situation has been adjusted. Paper competition will continue in the first quarter of 2019.
Interpretation: The decline in demand will inevitably lead to fierce competition in the industry. It is difficult to maintain continuous price increases under a strong competition of food and clothing.
Invisible monopoly under tacit agreement
The executive said that now the paper mills can be left bigger and stronger, and the market even has a monopoly situation, which leads to the pricing power of the original paper in the hands of a few leading paper companies. "The leading paper enterprises will not have a price war. Everyone is already familiar with the market. Only a tacit price will win the profits. There will be no price competition, and the pressure will only be transmitted to the downstream paperboard factory. As for the paperboard factory, how to operate the market. Will not affect the profit of paper mills.
Interpretation: In the long run, the price of paper mills will be operated simultaneously. As a secondary plant of the paperboard factory, it is difficult to have an effective paper negotiation strategy.
The edge of the upstream tuyere
“In fact, in 2016 and 2017, paper companies’ profits have been growing at a high rate. In 2018, market demand is weak, downstream paperboard mills are purchasing less, and raw material costs are increasing to further reduce paper mill profits. Paper mills can only improve profits. Product prices.†Paper-based executives told reporters that next, major paper companies will work hard on cost control. Now many companies have already made advances in upstream raw materials and achieved good results. However, entering the downstream paperboard factory may be the next one. tuyere.
Interpretation: The penetration of the whole industry chain to the cardboard and carton links to maintain high profits and long-term stability is the core appeal of this round of price increases!
The success of this round of price increases was based on the strong advancement of the upstream paper mills, the fuel boost from the media, the short-term cover-ups that started after the year, and the expected price index of the credit-downs.
On the one hand, the carnival of price hikes is an empty assembly line, downtime and other single lines. Who can fight the price increase and the lack of orders? Maybe you will see it soon. If you can’t see the real chapter in March, the paper price must be hit in April. Back to the original shape, the bleak situation that began in October 18 is evidence!
Editor in charge: Ge Hongyan
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