After half a year, the three major producers of white cardboard, including Asia Pulp & Paper Co.，Ltd. of Sinar Mas Group (including Bohui Paper), International Paper & Sun Cartonboard Co.,Ltd and Chenming Paper, issued a price increase notice concurrently, saying that the price of white cardboard would rise by 100 yuan/ton from February 15.
"Although the price increase is not large, it is not easy to implement it." An insider told the Securities Daily that "since 2023, the price of white cardboard is still at a historical low, but there has been a positive trend. It is estimated that the industry will usher in a large-scale price increase in March this year. This round of price increase issued by several paper companies is more like a tentative price increase before the peak season."
A tentative increase of white cardboard
As an important part of packaging paper, white cardboard has distinct consumption attributes, and the total proportion of drug, cigarette and food packaging is about 50%. According to the RoyalFlush’s data, the price of white cardboard experienced a huge fluctuation in 2021, reaching more than 10000 yuan/ton from March 2021 to May 2021, and then fell sharply.
In 2022, the price of white cardboard was generally low, especially from the second half of 2022. As of February 3, 2023, the price of white cardboard was 5210 yuan/ton, still at a historical low.
For the situation of the white cardboard market in 2022, Minsheng Securities summarized as "overcapacity in the industry, pressure on domestic demand, and partial hedging of external demand". Pan Jingwen, an analyst at Sublime China Information, told the Securities Daily that the domestic demand for white cardboard was less than expected last year, which caused the overall price of white cardboard to fluctuate downward. The insiders also said that while the downstream demand for white cardboard was shrinking, there was a large number of new capacity increase at the supply side, and some paper enterprises converted white board capacity into white cardboard capacity. Therefore, despite the quick growth of the export market, the situation of domestic supply exceeding demand was still very serious.
However, Chenming Paper and other leading paper companies said that although the export business of white cardboard has declined to some extent recently, with the gradual recovery of downstream demand, the white cardboard market may come out of the trough. Kong Xiangfen, an analyst at Sublime China Information, also told the Securities Daily that with the gradual increase of market activity, the white cardboard market will start to warm up and rise. However, due to the fact that the downstream construction has not yet fully resumed, the market fluctuation is temporarily weak, and traders are still wait-and-see.
In the interview, many insiders believed that the price increase of paper enterprises was a tentative price increase before the peak season in March this year. "Whether it can be implemented depends on the changes in the demand side. "
Different performance of the paper market
The reporter of Securities Daily known in the interview that in addition to the price increase issued by the three major enterprises of white cardboard recently, there are also sporadic price increases in white board, kraft paper and other raw paper. "The industry may raise the price of raw paper for the first time since the Spring Festival." The insiders told reporters that although the increase in the price of paper, especially packaging paper, was relatively small, it also reflected the attitude of paper companies to raise prices to some extent.
On the contrary, the recent prices of the main types of packaging paper, corrugated paper and carton paper, are mainly stable, and the prices in some regions are still slightly down. Lv Yanshuo, an analyst at Sublime China Information, told Securities Daily that after the end of the Spring Festival holiday, the price of upstream raw material of corrugated and cardboard, has declined significantly, and the support of cost has weakened. In addition, the downstream market is still in the recovery stage, and the price of corrugated acrdboard has declined slightly with stability.
Looking at the whole year, Sublime China Information expects that the overall price of corrugated and carton paper will keep fluctuation in 2023, but the annual average price may still show a downward trend compared with 2022. Lv Yanshuo said, "In 2023, the supply and demand of corrugated and carton paper are expected to increase, but the overall increment of supply is greater than the demand. "
Compared with the low expectations of the wastepaper, the industry believes that the cost of pulp and paper enterprises can be improved this year, especially with the expansion of UPM in Finland and Arauco in Chile, which will add nearly 4 million tons of pulp capacity to the global pulp market and have a certain easing effect on the global pulp supply shortage. Cinda Securities reported that it continues to be optimistic about the quarterly improvement trend of the profits of leading paper companies and suggests that the industry should pay attention to the subsequent price increase in the context of the recovery of demand.