Pulp prices continue to rise, or will drive the paper industry competitive landscape change

Industry barriers appear, leading paper companies have launched pulp production capacity

It can be expected that the pulp capacity will become a medium - and long-term competition barrier in the paper industry, to this end, the major paper enterprises have launched pulp capacity. According to Zhuo Chuang Information statistics, in 2021 and after China's new pulp capacity accounted for about 52% of the world's new pulp capacity.

Caap reporter combing public information found that since 2019, including Nine Dragons Paper (02689.HK), Liwen Paper (02314.HK), Asia-Pacific Sambo, Chenming, Sun, and other large domestic pulp and paper enterprises have almost all launched new capacity plans for pulp, with a total of nearly 20 million tons of new capacity. At the same time, Mountain Eagle International (600567.SH), Liwen, Nine Dragons, Sun and other giants have chosen to deploy pulp production capacity in Southeast Asia, which is closer to the source of wood chip raw materials or overseas ports. Industry analysts believe that the new pulp production capacity of various paper companies will be put into production, and domestic large paper companies will obtain low-cost pulp, and their profitability will be further enhanced.

Chenming, Sun and Bohui, which have integrated production mode of forest pulp and paper, have lower cost advantages.

It is reported that Chenming Paper has the largest pulp production capacity in China, and the current self-pulping production capacity has been matched with its own paper production capacity. At the same time, the Huangganglin pulp and paper integration phase II project has started construction in December 2020, and the annual capacity of new pulp is about 1.05 million tons; Sun Paper is located in Laos, Guangxi Beihai forest pulp and paper integration project is gradually under construction, the project will be put into operation will greatly improve the company's pulp self-sufficiency rate; Bohui Paper has its own pulp production capacity of about 800,000 tons/year. With the ownership of APP Group, the company may obtain better wood pulp and enjoy rich cost dividends through APP's upstream forest land and abundant raw material resources at home and abroad.