Overall, due to the decline in sales and prices of corrugated base paper, box board paper and white cardboard, the company's performance declined year-on-year. The paper market once again experienced a "lost half year", which greatly exceeded the previous expectations of the industry enterprises.
The overall downward trend of paper prices has not reversed
Since the crazy price of industrial paper in 2021, the price of white card has been declining for three years, and the box board paper and corrugated base paper have been two and a half years.
Corrugated paper, the price of the first half of 2024 overall shock downward. Taking AA grade 120g corrugated paper as an example, the average price in the first half of the year was 2749 yuan/ton, down 7.93% year-on-year.
In terms of box board paper, the first half of 2024 will be mainly reduced. According to Zhuo Chuang information data monitoring, in the first half of 2024, the average price of China's box board paper market is 3744 yuan/ton, down 8.75% year-on-year.
In terms of white cardboard, according to Zhuochuang information data, the average price of domestic white cardboard market in the second quarter was 4417.10 yuan/ton, down 7.24% from the first quarter, and the decline expanded by 4.47 percentage points, down 1.55% year-on-year.
The price of industrial paper fell, consistent with the trend of PPI. In the first half of the year, China's PPI has been unable to turn positive, down 0.8% year-on-year in June, down 0.2% month-on-month.
Imbalance between supply and demand is the main reason for the decline
Today's passive situation in the paper market, the crazy capacity expansion in 2016 should be mainly responsible. At a time when demand is at its peak, paper mills are expanding capacity exponentially.
According to Zhuo Chuang information monitoring data show that in the first half of 2024, the production and imports of box board paper have increased. The supply of box board paper is expected to be about 19.93 million tons, an increase of 980,000 tons year-on-year. In the first half of 2024, the production of box board paper was 13.95 million tons, an increase of 5.05%. The cumulative import volume of box board paper from January to May in 2024 is 2.45 million tons, which is expected to be 2.98 million tons in the first half of the year, an increase of 22.63%.
As of the end of June, the capacity of box board paper was 45.37 million tons, an increase of 4.88%.
According to data from Zhuochuang Information, as of June 24, the total output of white cardboard was 7.311 million tons, up 32.9% year-on-year. In the second quarter, domestic demand for white cardboard was 2.79 million tons, a decrease of 6.88% from the previous quarter. In the second half of the year, Nine Dragons Paper (Beihai) forest pulp and paper integration project annual output of 1 million tons of white cardboard paper production line is expected to be put into operation in the third quarter of this year, and the increase in supply may exert certain pressure on paper prices.
Overall, the supply continued to increase in the first half of the year, and the demand continued to shrink, is the root cause of the failure of the paper mill price.
Second half paper price trend analysis
However, due to the downturn in all walks of life, including thermal coal, waste paper prices have been reduced accordingly, and the profitability of paper mills has formed a certain support. However, the rise in the price of pulp has formed a negative for white cardboard.
According to Zhuo Chuang information, taking the market price of Q5000 kcal thermal coal in Shandong as an example, as of June 24, the mainstream market price was 780-805 yuan/ton, a cumulative decline of 65 yuan/ton from the beginning of 2024, a decline of 7.58%; The average price in the first half of the year was 803.22 yuan/ton, down 129.66 yuan/ton from the same period last year, down 13.9%.
From January to June, the average price of yellow waste was 1514.4 yuan/ton, down 9% year-on-year, and the overall demand declined slightly.
However, the price of wood pulp rose against the market. According to Zhuochuang information, as of March 29, the average price of China's imported broadleaf pulp spot market in the first quarter was 5597.73 yuan/ton, up 702.28 yuan/ton from the end of the first quarter of last year, an increase of 14.35%; As of June 28, the average price of imported broadleaf pulp in the second quarter was 5666.68 yuan/ton, up 9.31% from the previous quarter and 34.79% from the same period last year.
At present, paper mills and institutions are generally positive and optimistic about the rise in paper prices in the second half of the year. Zhuo Chuang information analysts believe that in the second half of the National Day Mid-Autumn Festival, as well as the Spring Festival peak season pull, paper prices are expected to rise slightly.
In the case of greater supply than demand, and exports have exceeded expectations, paper prices still need a substantial recovery in domestic demand to support, but in the opinion of Bao Xiaobian, there is little hope.
