2023 China pulp and paper industry is full of challenges and opportunities

Modern pulp and paper making is a technology-intensive industry dominated by high and new technology. This is a complex system composed of more than ten fields of technology such as chemistry, chemical industry, forestry, machinery, materials electronics, business management, thermal engineering, environment, information science and so on. Various technologies cross each other, complex equipment, the need for all aspects of technical personnel, so it is also a talent-intensive industry.

According to statistics, the carbon emissions of the pulp and paper industry are about 100 million t/a, accounting for about 1% of the total emissions in the country, most of which come from fossil fuel combustion, mainly coal with high carbon content. Therefore, the primary issue to achieve green construction is to adjust the energy structure of the traditional paper industry, which is high in energy consumption, including optimizing the energy structure, building a clean, low-carbon, safe and efficient energy system, improving the utilization efficiency and using renewable energy to replace it.

According to the analysis of the "2022-2027 pulp Industry In-depth Research and Future Development Trend Forecast Report" by the Research Institute of Puhua Industry:

With the increase of the national demand for paper and paper products, the supply gap of fiber raw materials in China's paper industry has increased, and domestic pulp has been far from meeting the domestic demand, even if a large number of imported wood pulp, waste paper and commercial wood chips are needed to alleviate the tense situation of papermaking raw materials in China. Compared with heavy industries such as steel and machinery, pulp and paper industry belongs to the category of light industry. However, with the rapid growth of China's paper consumption and production, the increase in the total income and profit of the main business, the pulp and paper industry has become an important part of China's manufacturing industry.

Due to its vast size, China has a significant influence in the global pulp and paper trade. However, as trade, legislation and environmental changes continue to impact the country and disrupt its vibrant manufacturing sector, it could have a ripple effect on producers around the world. The pulp and paper industry is booming, with new innovations and trends emerging across multiple sectors. Over the past year, many industry topics have made waves, from the development of paper towels and towels to innovative pulp and soaring demand for corrugated paper. At present, waste pulp is the main reason for the lack of domestic forest resources, sufficient supply of waste paper and low price of waste pulp. The price of domestic broadleaf pulp and coniferous pulp reached a new high, and the profit of domestic pulp enterprises improved significantly. Affected by the news of the earthquake in Chile, the strike in Finland, and the strike of workers in the pulp mill in Brazil, the price of wood pulp in the international market has risen rapidly.

In the face of the current status of China's paper industry, the industrial chain under the trend of environmental protection and administrative pressure, the top raw material end of the industrial chain has undergone earth-shaking changes in the past two years. In the next few years, we will not invest in paper production capacity, and will increase investment in pulp production lines, while continuing to increase investment in technology research and development, and the ultimate goal is to break through the transformation bottleneck of traditional industries with science and technology, and transform traditional pulp and paper enterprises into scientific and technological environmentally friendly pulp enterprises.

2023 China pulp and paper industry is full of challenges and opportunities

Due to the ongoing impact of the COVID-19 epidemic, Chinese consumers' attention to health and hygiene is also increasing. Product features such as cleanliness, safety and "food grade" are increasingly appealing to consumers. As urbanization and disposable income increase, the overall demand for household paper will continue to rise. In addition to traditional products such as toilet paper, facial tissues and toilet tissues, China's household paper companies have also launched differentiated products such as wet toilet paper, moisturizing tissues, disinfection wipes, and moisturizing facial tissues to meet the special needs of specific consumption scenarios. Factors such as differentiated demand and slowing economic growth will lead to different business strategies for household paper manufacturers.

Chinese paper enterprises vary in size and capital strength, so the procurement channels and strategies of enterprises are also different. The vast majority of pulp and paper integration projects focus on the production of mechanical pulp for wrapping paper, and some projects will also involve the production of printing paper. Only a few household paper manufacturers have integrated pulp and paper plants that bleach sulphate broadleaf pulp.

According to the forecast, China's pulp imports are likely to recover in 2023. In addition, the import structure is likely to be further optimized and the proportion of bleached sulphate broadleaf pulp will increase. The production of bleached kraft softwood pulp generally lacks cost advantages compared to bleached kraft broadleaf pulp. As the capacity of bleached sulphate broadleaf pulp expands, the price gap between the two products will continue to exist. As a result, producers in China may need to increase the proportion of bleached sulphate broadleaf pulp in the feedstock mix.

The Chinese government advocates green development and advocates the whole society to use more materials that conform to the concept of sustainable development and environmental protection. Packaging materials based on natural wood fibers are undoubtedly the best choice, which provides a market opportunity for pulp as a renewable and sustainable raw material. The commissioning of the new pulp plant in Uruguay will take UPM's pulp supply capacity to a whole new level and contribute to the thriving paper industry. As the world's largest pulp market, China is very important for UPM pulp. UPM has accumulated a wealth of experience and knowledge in the Chinese market, and the Asia Pacific sales and service team has been established and operated for 11 years. Currently, the Asia Pacific team has 18 professionals.