Consumption off-season downstream demand is weak, is there an investment opportunity in the paper sector?

At the same time, Zhao Xiaojun said that at the beginning of this year, downstream paper mill enterprises normal storage, with falling prices, weak demand, lack of confidence in paper mills, showing a wait-and-see situation, some paper mills from a month's storage cycle reduced to half a month, resulting in further price declines. After taking the initiative to go to the warehouse in March and April, a small restocking in May, broadleaf pulp has warmed up, and the needle width spread has narrowed, but as the demand for 618 stocks in advance has begun to slow down, the price has weakened again.

As pulp supply continues to climb, domestic pulp stocks are also growing. Li Qing said that the domestic pulp inventory is about 2.3 million tons, and the European port inventory is 1.8 million tons. In absolute terms, inventories are at high levels both at home and abroad. Historically, the highest value of domestic inventory is about 2.43 million tons, and overseas is about 2 million tons. It can be seen that the current inventory level is very close to the record level.

Li Qing said that at present, the purchase of pulp should be divided into pulp types, and there has been a sustained replenishment purchase of broadleaf pulp since the beginning of May, and a large number of replenishment warehouses once led to the current tight supply of domestic broadleaf pulp. That has not been the case with coniferous pulp, the standard for futures contracts. Basically, it is still based on demand procurement, and the transaction is relatively depressed.

In the face of continuous decline in pulp prices, the operating rate of paper enterprises is also the focus of market attention. The reporter asked about the start of some paper enterprises. It is understood that the operating rate of downstream paper enterprises is basically at a normal level, with little difference from normal years, but compared with last year, there is a significant increase (except for wrapping paper). Since the second quarter, with seasonal changes, from the demand season of downstream paper into the demand off-season, the operating rate in this period there are obvious signs of continued decline. But the magnitude of the decline is also historically normal.

However, Li Qing said that as pulp prices continue to bottom out, the next need to pay attention to downstream centralized replenishment and pulp plant maintenance. If there is a large area of downstream concentrated replenishment in China, it will also have a significant pulling effect on the absolute price of the stage. And if the number of pulp mill maintenance due to low prices continues to increase, it will also change the overall supply and demand balance of coniferous pulp. In addition, in the long term, once the demand for coniferous pulp in Europe has increased, resulting in a decrease in the amount of coniferous pulp flowing into the Chinese market, the driver of the decline in coniferous pulp futures has disappeared.

The agency says the pulp sector may benefit

According to a research report released by Minsheng Securities, the demand for cultural paper is strong, mainly from red publications and teaching materials, and the wrapping paper depends more on the recovery of downstream consumption, and under the background of steady growth, the demand for wrapping paper is optimistic. In the context of low profitability in the industry, paper enterprises generally delay the progress of capital expenditure, and the potential supply pressure is gradually released.

At the same time, in terms of cost, the price of pulp in the second quarter is still in the declining channel and the inventory of high price pulp is exhausted, and we are optimistic about the continuous optimization of profit of wood pulp paper products, focusing on cultural paper enterprises with strong demand certainty; At the same time, pay attention to the improvement of demand expectations, the profitability of packaging paper enterprises. Related stocks are Sun Paper (002078.SZ), Yueyang Lin Paper (600963.SH), Chenming Paper (000488.SZ), Bohui Paper (600966.SH), Mountain Eagle International (600567.SH).

China Galaxy Securities research report said that the paper sector as a whole under pressure, pulp and paper and special paper in the finished paper price increase and capacity expansion, revenue to achieve steady growth, while inventory pulp prices at a high level caused a sharp decline in profitability; The downstream demand for waste paper is weak, resulting in a continued decline in the price of finished paper, and profitability is at a low level, with a small increase in revenue and profit from profit to loss.

Looking forward to the future, with the global pulp production capacity, pulp prices are rapidly declining, taking into account the impact of the inventory cycle, it is expected that Q2 pulp and paper and special paper profit elasticity will be released; The core contradiction of waste paper is still the terminal demand, and it is expected that the subsequent improvement in demand will be expected to bottom out.

With the fluctuation of pulp prices, Chenming Paper said on the interactive platform on June 7 that the price of imported pulp is affected by various factors such as supply and demand, international freight, and the RMB exchange rate, and the conversion of purchased commodity pulp into liquid into the paper production line still requires a certain cost. At present, home-made pulp still has certain advantages over imported commercial pulp.