Supply contraction is difficult to change downstream downturn pulp strength is difficult to continue

(2) The trend of finished paper production capacity is differentiated

In 2021, the production capacity of domestic finished paper continued to increase, and in the first half of the year, the industry put into production capacity of about 1.51 million tons, reaching the highest level in the same period in history. Includes:

Zhongshun Jierou (002511) 2 paper machines before the 100,000 tons expansion project in Xiaogan Base is put into operation;

Jinhongye put into production the first paper machine with a production capacity of 780,000 tons in the new base in Nantong, and 60,000 t/a in Xiaogan base;

Libang Group put into operation 50,000 tons of production capacity in Xiaogan base;

Taisheng Group put into production the first batch of 250,000 tons of capacity in a new base in Anhui;

Shengquan Group's new base in Jinan was 20,000 tons, and the new base in Daqing, Heilongjiang put into production the first 100,000 tons.

From the relevant news disclosed by the market, more than 7 million tons of projects have been announced in 2022 and beyond. Domestic finished paper production capacity is still in the rising stage.

The total production of finished paper increased, but the production of wood pulp paper decreased. From January to October 2021, the cumulative output of finished paper in China increased by 8.4% year-on-year, and the paper production gradually fell in the second half of the year, the probability of paper mill opening fell sharply in September, and the output of finished paper fell with it, and in September, the output fell to the low value in the past five years, and after October, with the impact of power rationing weakened, the paper mill started up. Among them, the box board corrugated paper remained stable, while the output of other paper fell.

Combined with Zhuo Chuang statistical data, from January to November, white cardboard production decreased by 7%, household paper production decreased by 4%, coated paper and double adhesive paper production decreased by 16% and 3%, from the sample paper factory statistics of finished paper production changes, the first 11 months of domestic pulp demand reduction is expected to reach 1.6 million tons. The decline in production of wood pulp paper mill mainly occurred in the second half of the year, after the paper price began to fall in the second quarter, the profit of paper mill was lower, the warehouse was poor, and the probability of paper mill opening declined.

From the point of view of the price of finished paper in 2021, most of them have experienced large fluctuations. The large axis base paper in Hebei region reached 7000 yuan/ton in March, and then gradually fell to less than 6000 yuan in September, and rose slightly by 5% in the fourth quarter, rising to 6300 yuan/ton. At the beginning of the year, the rising cost of wood pulp and the downstream replenishment before and after the Spring Festival led to the continuous rise of life paper, but then the demand turned weak, the downstream acceptance capacity was insufficient, leading to the price reduction of paper mills, after the wood pulp fell, the cost of the lack of support, the paper mill still raised prices in the middle of the year, but failed to implement, until October, with the decline in early construction, supply pressure relief, life paper did not rebound. The current price is on the low side of the five-year median value. The increase in household paper production capacity is large, and there is still a large amount of production capacity after 2022, which also leads to low capacity utilization, and it is difficult to maintain a high paper price.

White cardboard rose to 10,000 yuan/ton in early 2021, began to gradually decline in May, and fell to less than 6,000 yuan/ton in the second half of the year, after November, domestic demand was weak, and the market feedback export orders were acceptable, driving the price of white cardboard to rebound. White cardboard plans to put more production capacity in the future, but the white cardboard market concentration is extremely high, so the price control ability is stronger than household paper.

Demand for cultural paper was initially affected by the "double reduction" policy in the second half of the year, and demand and price performance were weaker, the average price of double-tape paper fell from the highest 7300 yuan/ton in March to 5300 yuan/ton at the end of September, and returned to 5600 yuan/ton in December, basically the low range since 2016, and the difference between the high and low points of double copper paper in the year also reached 2000 yuan/ton. And the rebound at the end of the year is small, and the current price is at a low level since 2017. Demand for cultural paper is still facing downward pressure, the continuation of the trend of paperless, coupled with the negative impact of the education industry, which makes the price of cultural paper under pressure with demand."

The weakness of finished paper led to a sharp decline in the immediate production profits of paper mills, after the sharp rebound in pulp in late November 2021, due to the poor effect of finished paper lifting, resulting in the loss of profits of paper mills again, low-profit paper mills are expected to be difficult to improve the operating rate, you can see that the construction of tissue paper enterprises has fallen again.