Source: Yangtze River Futures

In 2018, the year of macroeconomic risk concentration broke out. At the same time, the year of Sino-US trade friction broke out completely, and the paper industry suffered a “cold winter”. However, 2019 will be a broken year. The economic situation is expected to bottom out. The paper industry is expected to be boosted by the downstream replenishment, and pulp prices are expected to come out of the quagmire.

First, in 2018, the paper industry has a cold wind

1. The total operation of the paper industry

As of October 2018, China's paper industry production cumulative data: paper and cardboard 97.35 million tons, compared with the same period last year, the output decreased by 8.97 million tons, down 8.4%; as of September, pulp 10.53 million tons, compared with the same period last year, the output decreased by 2.25 million tons , a decrease of 16%; paper products of 42.36 million tons, a decrease of 12.19 million tons compared with the same period last year, a decrease of 22.3%.

In terms of industrial economic indicators, according to the statistics of the National Bureau of Statistics, the completion of major economic indicators of the above-scale pulp and paper and paper products enterprises from January to October 2018 was significantly worse than last year, especially focusing on profits and inventories: the main business of the whole industry. Revenue was 1,166.5 billion, a decrease of 146.1 billion over the same period of last year, down 11.1%; the industry's profit was 65.7 billion, a decrease of 19.2 billion over the same period last year, a decrease of 22.6%; the total inventory of the whole industry was 60.8 billion, an increase of 11.8 billion over the same period last year. 24.1%.

The data that have a great impact on the market is enterprise inventory, which is basically increasing throughout the year in 2018, while in the past years, the months of May, June, July and September generally declined, thus keeping the inventory within a controllable range. .

In terms of pulp imports, a total of 20.79 million tons of imported pulp was added to October, an increase of 1.35 million tons, or 6.9%, compared with 19.44 million tons last year. The cumulative import of bleaching needle pulp was 8,274,300 tons, an increase of 1,681,500 tons compared with last year, 6,592,800 tons. Tonne, an increase of 25.5%; the cumulative import of bleaching and broad pulp is 9,490,600 tons, an increase of 927,000 tons, an increase of 10.8%.

2. Overview of industry chain prices

In the case of a significant shrinkage of the total amount, we see that in terms of price, the entire industrial chain has almost completely declined.

Downstream: The market price of Huaxia Sun Coated Paper (105g) dropped from 7425/ton at the beginning of the year to the current 6450/ton, down 975/ton, a drop of 13.2%; the market price of Huaxia Sun Double Tape (70-100g) from the beginning of the year 7575/ton fell to the current 6550/ton, down 1025/ton, down 13.5%; Chenming Paper White Cardboard (250g) market price dropped from 6550/ton at the beginning of the year to the current 4800/ton, down 1750/ Tonne, a decrease of 26.3%; the market price of Xiaolong cardboard paper (126g) fell from 5,820/ton at the beginning of the year to the current 5,420, down 400/ton, a decrease of 9.3%; the market price of 玖龙瓦楞 (100g) from the beginning of the year was 4,620/ The ton fell to the current 4370/ton, down 250/ton, down 5.4%.

Raw material market: From the average price of wood pulp, the average price of wood pulp in South China is 7000/ton at the beginning of the year, and the current average price is 6100/ton, down 900/ton, down 12.9%; the price of silver star is 7100/ The ton dropped to the current 6100/ton, down 1000/ton, down 14.1%; the import price was relatively stable, but the recent downside, the silver star CFR offer fell from 860 US dollars/ton at the beginning of the year to the current 780 US dollars/ton. , fell 80 US dollars / ton, a decline of 9.1%; waste paper, Jiangsu, Zhejiang and Shanghai yellow paper products fell from 2,150 / ton at the beginning of the year to the current 1880 / ton, down 270 / ton, down 12.6%. On the contrary, the dissolving pulp market performed strongly, and the dissolving pulp price index performed steadily throughout the year, even rising from 7600/ton at the beginning of the year to the current 7680/ton, so a large amount of pulp production capacity was converted into dissolving pulp capacity.

Second, the macro economy is weak, and the demand for paper products is declining.

1. Global macroeconomics are weakening

The US economy, once "outrageous", also showed signs of weakness.

In 2018, the overall global growth slowed down markedly, and the US economy was relatively "outstanding". In 2018, global economic growth slowed significantly compared to 2017, and the PMIs of developed and emerging economies began to peak at the end of 2017. However, the economic growth rate of developed countries has accelerated compared with emerging markets, which is largely due to the strong growth of the US economy.

The reason why the United States can maintain relatively high growth is mainly due to tax reform. However, it should be noted that the tax incentives for the residential sector and the corporate sector may be weakened later, which is reflected in the economic data of the third quarter of the United States. The weakening of US stocks also reflects this expectation.

The global economy is underperforming

From the latest 3Q data, the global performance is not good. In 2018, economic growth in the European region slowed down, and net exports were the main cause of economic growth. In 2017, the economic performance of the European region was strong, and the real GDP for the whole year increased by 2.30% year-on-year, reaching the highest level in the past decade. Since 2018, the economic growth rate of the European region has slowed down. In the first three quarters, the real GDP growth in the European region was 0.4%, 0.4%, and 0.2%, respectively. It ended the stable growth of 0.7% since the fourth quarter of 2016. Japan’s economic growth has declined in 2018.

In emerging countries, they are currently in a quagmire of relatively low growth. India has performed relatively well, with performance in Brazil, Russia and South Africa being poor. The weakening of demand from China has had a huge impact on these countries.

China's macro economy faces many downward pressures

Although every year we will ridicule that "this year is a very difficult year", but in the end it is relatively smooth. And 2018 is indeed the year of the most economic pressure in recent years.

The strong “de-leverage” has made the fiscal and monetary “double tightening”, which has an impact on the total economic demand, and the difficulty of financing private enterprises has increased. Sino-US trade frictions have escalated, and external demand is expected to be greatly impacted. It has become the biggest negative factor for the market to bearish China's economy. In 2018, both consumption and investment demand have weakened, which has intensified the market's concerns about China's economic fundamentals.

In 2018, the Fed’s interest rate hike and intensity are relatively high. The Fed’s continued interest rate hike brings a strong beauty. In 2018, China’s economic cycle is weaker than that of the United States, which has led to a large depreciation pressure on the renminbi and international capital outflows. pressure. The expected increase in the depreciation of the renminbi will lead to the outflow of international capital, which will bring greater pressure on the Chinese capital market.

2. Demand for paper products declines, but data logic needs to be clarified

From the domestic point of view, the current three major pulp stocks in Baoding, Qingdao and Changshu stocks are in a very high position, the total inventory of the three places totaled 1.41 million tons, compared with 595,000 tons last year, an increase of 815,000 tons, a year-on-year increase 137%.

From a global perspective, the stock of wood pulp is also accumulating, and the cumulative stock of wood pulp in several major ports around the world has reached a new high since 2013.

Third, the supply and demand of pulp is long-term optimistic

1. Domestic demand is expected to pick up slowly

The demand increase in the new year may come from two aspects: one is the steady growth of real demand; the other is the change of the inventory cycle.

Real demand: Paper is a kind of end-consumer product with a wide distribution of demand. It is difficult to be affected by the rise and fall of a single industry. Many sub-products also have just-needed attributes, so their overall demand is more rigid.

In terms of macroeconomics, the form of next year is better than this year. This year is a year of concentrated exposure to domestic economic risks. The “de-leverage” superimposed “China-US trade friction” and the real economy was hit hard. Next year is a year of gradual resolution of economic risks. The recovery of the market is mainly based on domestic demand, especially the terminal consumption, which may be driven by the government's relevant stimulus policies.

Inventory cycle: From the current PMI data, the entire manufacturing industry is in the destocking stage, one because of insufficient demand and the other because of financing difficulties. The country, the current targeted policy is also reflected in these two aspects, it is possible to reverse the market expectations. Once the real economy emerges from such a vicious circle, the demand for replenishment stocks reappears, and the inventory demand for bursts will be very obvious.

2, the pulp supply is tightening later

According to PPPC statistics, after a significant increase in production capacity over the past few years, the drifting needle pulp will grow slightly in the next 2019, and by 2020, capacity may enter negative growth. In the past few years, the production capacity of the bleaching pulp has increased more rapidly, including the investment of many domestic enterprises, but it will enter a low growth year in 2019. And in many of the production capacity, some will turn to the production of dissolving pulp.

Therefore, from these circumstances, as long as the global demand growth rate is maintained at around 1%, a tight balance between supply and demand can be achieved.

According to Euromonitor's analysis, the average production cost of global wood pulp is 634 US dollars / ton, and the total cost of RMB is 5075 / ton. In general, the cost of bleaching needle pulp is significantly higher than that of bleaching pulp. It is expected that the cost of drifting needle pulp will be in the range of 5300-5400/ton, depending on the fluctuation of the RMB exchange rate.

The domestic environmental protection policy has also reduced a large amount of non-compliant wood pulp or non-wood pulp production capacity from the supply side, and also reduced the supply of external waste, which has formed a favorable supply for the overall pulp supply.

3. Trade friction becomes the biggest risk point

The Sino-US trade friction has been carried out until now. In fact, it can be seen that the two countries share common core interests and irreconcilable contradictions.

The core interests of both countries are normal trade needs. The demand for Chinese products in the United States is somewhat rigid, especially if other countries do not have the capacity to provide such a large supply. Therefore, the normal trade demand of the two superpowers cannot be ignored, which is the basis for the easing of later trade negotiations.

The irreconcilable contradiction between the two countries lies in the continuous development of China and its vested interests. In response to some of China's national policies, the United States has resistance, and it wants to curb China's rapid development, especially the fast-tracking strategy of high-tech and the geopolitical layout. This aspect is another basic interest that China cannot give up.

Fourth, the market outlook

As mentioned above, the author is optimistic about the future trend of pulp, mainly based on the optimistic judgment of the macro economy and the expectation of tight supply and demand of pulp in the future. The most important and biggest variable of these reasons is the macroeconomic trend.

If the macro economy slowly steps out of the quagmire, then the projection into the paper industry chain will be the demand of downstream enterprises will become better, the orders of enterprises will increase, and the inventory will begin to be built. The inventory of papermaking enterprises will begin to degrade, and the inventory of pulp will gradually be degraded. process.

In the worse case, the economy is sluggish, exports continue to languish, packaging paper is hit hard, cultural paper has a certain loss, and household paper continues to grow slightly, and the overall situation is reduced. The market will test the cost support of the international market. The price of bleaching needles is close to 4000/ton.

In general, exports are blocked, domestic demand is stabilized or boosted, domestic demand is expected to recover slightly, and the overall market is not over. The price of bleaching needle pulp is expected to exceed 6000 and move toward 6500.

In the optimistic situation, the Sino-US trade negotiations reached a satisfactory consensus between the two sides, and the pulp price could break through 7000.

Editor in charge: Ge Hongyan

This article is posted on the website for the purpose of transmitting more information and does not imply endorsement of its views or confirmation of its description.

Article source address: http://

Pet Collar

Pet Collar,Cute Dog Collars,Personalized Dog Collars,Personalized Dog Leashes

Yangzhou Pet's Products CO.,LTD , https://www.paiqipets.com