Analysis of the middle and downstream markets of China's paper industry chain in 2021

With the continuous development of China's economy, constantly stimulate the demand for paper, providing a broad space for the development of China's paper industry, at present, China has become an important international paper production and consumer, since 2009, China's paper production and consumption has been ranked first in the world.

Market size

China's paper industry after nearly 30 years of development, the scale of the industry has continued to grow, has become a basic balance from the past shortage type. In recent years, a basic balance between production and demand has been formed, and most products have basically met the domestic market demand. With the rapid development of modern business and logistics industry, whether transportation packaging or sales packaging, corrugated boxes have become one of the most widely used packaging containers in modern business and trade.

Data show that from January to July 2020, the national production of machine-made paper and cardboard was 68.438,000 tons, down 3.3% year-on-year. In July, the national machine-made paper and cardboard production of 10.665 million tons, an increase of 4.9%, is expected in 2021, China's paper and cardboard production can reach 106.55 million tons.

Industrial chain

The paper industry chain from upstream to downstream can be divided into pulp, paper and paper products. In the upstream pulp industry, can be divided into wood pulp, non-wood pulp and waste pulp; The papermaking process in the middle reaches, according to different product categories, can be divided into newsprint, cultural paper, packaging paper and special paper four sub-industries; Downstream applications for paper products can be divided into wrapping paper consumption and Mandarin printing consumption.

Upstream of paper industry

1. Market size

China is a large country of pulp consumption, pulp manufacturing industry development has a long history, the industrial technology is more mature, a total of more than 20,000 pulp manufacturing enterprises in the country, the upstream of the paper industry is biased to complete competition, the paper industry has full bargaining power in the raw material link. According to the "China Paper Industry 2019 Annual Report" released by the China Paper Association, from 2015 to 2019, China's pulp production showed fluctuations, due to the advancement of digitalization and paperless, there are more alternatives in the downstream market of pulp, and the output of pulp as a whole has been declining in recent years. In 2019, China's pulp production was basically the same as that of 2018, at 72.07 million tons. Affected by the new coronavirus epidemic, many industrial factories have shut down, resulting in a decline in pulp production, but it is expected that with the continuous prevention and control of the epidemic market will gradually heat up.

2. Imports of waste paper

Another important factor affecting the price of raw materials is the implementation of the "solid waste ban". In June 2018, The State Council issued relevant opinions, proposing to "strengthen the prevention and control of solid waste pollution", comprehensively prohibit the entry of foreign garbage, severely crack down on smuggling, significantly reduce the types and quantities of solid waste imports, and strive to basically achieve zero solid waste imports by the end of 2020. Once the ban on solid waste came out, this part of the business of foreign waste import changed. Waste paper imports need to be approved in accordance with the regulations, and the amount of foreign waste imports is expected to be about 5 million tons to 6 million tons in 2020, and in 2017, the import volume reached about 25 million tons, and now only one-fifth of the unrestricted.

Up to now, the first four batches of imported waste paper permits in 2020 totaled 3.21 million tons, and a total of 65 enterprises were approved, while the annual import volume of waste paper in 2019 reached 10.36 million tons, down 39% year-on-year. Many analysts said that if the future import of waste paper is reduced, the price of waste paper will continue to rise. In the future, with the gradual correction of raw material prices and weak downstream demand, coupled with the contradiction of excess capacity in the paper industry has not been solved, the price of paper products does not have the basis for long-term rise.

3. Major enterprises

Pulp is a fibrous substance obtained from plant fiber by different processing methods. It can be divided into mechanical pulp, chemical pulp and chemical mechanical pulp according to the processing method. The pulp produced in our country can be divided into wood pulp, waste pulp and non-wood pulp. Among them, waste pulp is the main type of pulp produced in China.

Paper industry Midstream

The middle reaches of the papermaking industry is the papermaking link, which can be divided into four sub-industries, newsprint, cultural paper, packaging paper and special paper, according to different product categories.

1. The proportion of consumption of paper and cardboard

Data show that in 2019, the consumption of paper and paperboard in China accounted for the highest 22.45% of box paperboard, followed by corrugated base paper and uncoated printed writing paper were 22.18% and 16.34%, respectively. The rapid development of the Internet has brought development opportunities for e-commerce, people's acceptance of online shopping continues to improve, and a large number of express packaging needs have brought greater development space for corrugated base paper and box board paper. At the same time, because the corrugated packaging products meet the green consumption standards, the future prospects are considerable.

2. Number and distribution of enterprises

On April 13, 2018, the Ministry of Ecology and Environment, the Ministry of Commerce, the Development and Reform Commission, and the General Administration of Customs adjusted the current "List of Prohibited Imports of Solid Waste" : 16 types of solid waste, such as stainless steel waste, titanium waste and wood waste, will be transferred from restricted and non-restricted import categories to the "Prohibited Import of Solid Waste Catalogue", which will be implemented from December 31, 2019. The ban on waste caused the gap in raw material demand to continue to expand, many enterprises in 2019 to lay out the paper industry, papermaking related enterprises registered 3,379, an increase of 13%. In the first three quarters of this year, a total of 3,455 papermaking related enterprises were added nationwide, an increase of 39.8%.

Enterprise check data show that Shandong Province has the largest number of papermaking related enterprises in the country, up to 6,298, accounting for 18.7% of the total, far more than the rest of the country. In addition, Guangdong, Zhejiang, Jiangsu and Jiangxi ranked 2-5 with 3,740, 2,414, 2,072 and 1,859, respectively.

3. Major enterprises

Downstream of paper industry

After years of development, China's paper consumption has changed from a shortage type to a basic balance, to achieve the goal of domestic demand, production and demand balance, the growth rate of domestic market demand will decrease year by year, and gradually return to the track of balanced development. China's paper industry after nearly 30 years of development, the scale of the industry continues to grow, the supply and demand relationship has changed from the past shortage type to the basic balance, the formation of a basic balance of production and demand pattern, most products have basically met the domestic market demand.

1. Electronics and home appliances

At present, China has become the world's communication IT, home appliance industry manufacturing center. The electronics industry and home appliances industry have achieved rapid and stable growth, and the variety of goods is increasingly rich. With the implementation of the "Clean Production Promotion Law", the drafting of the "Management Measures for Packaging Recycling and Utilization", and the official introduction of the "Management Measures for Pollution prevention and Control of electronic Information products" in line with the European Union, the domestic packaging of major electronic and home appliances has been committed to the direction of lightweight development, and the demand for new, energy-saving and environmentally friendly packaging materials continues to increase. Will bring a larger market space to the carton packaging industry.

2. Food and medicine

The rapid growth of food and pharmaceutical industry demand for carton packaging, on the one hand, because China's food and pharmaceutical industry has maintained continuous, stable and healthy development in recent years; On the other hand, the rapid growth of various food and drug markets has promoted the continuous expansion of this type of packaging market.