The hottest paper factory, please stop hyping the

Paper mills please stop hyping up prices. No one can afford these serious consequences

it is increasingly obvious that China's economy is leaning towards heavy industries such as iron and steel base and national defense, while light industries are facing an adverse situation of liquidity depletion. What will happen if this momentum continues? You may wish to refer to the 1960s and 1970s when the market demand for wrapping paper was cleared

the soaring of packaging base paper in 2016 not only gave many small and medium-sized paper enterprises a chance to die, but also made the profits of large paper enterprises soar. However, in the face of this rare market in a hundred years, the paper industry inevitably inflated, and began to empty their minds to hype up prices

in the past, all kinds of rallies and aunts rose in endlessly. After the Spring Festival, the Chilean fire, the two sessions in March, the environmental protection inspectors in April, the the Belt and Road and Fuchun paper industry in May took turns to stop production, and the paper mills strongly advocated that the base paper would soar

however, in the past month, the RMB exchange rate rebounded strongly, the prices of black bulk commodities such as coal fell sharply, the price of gasoline fell, domestic oil stations offered a discount of one yuan per liter, the market demand was weaker than expected, and packaging customers desperately pressed prices, but they turned a blind eye and continued to advocate price increases

the price rise of base paper in 2017 has been beaten repeatedly

looking back on the five waves of base paper price rise in 2017, it can be said that it has basically failed. Tile paper in South China fell by 1000 yuan in January; In February, tile paper and box board paper fell nationwide; In March, due to weak market demand, the paper mills broke out in a large area, leading to the disintegration of the base paper shadow price alliance; The decline in paper prices in April was boosted, but the market response was extremely cold; In May, paper mills in the Yangtze River Delta, Hubei, Henan, Anhui and Jiangxi provinces insisted on raising prices, but the actual implementation was not ideal

after reviewing the price rise of base paper in 2017, it is found that the main reasons for the failure of the price rise are roughly as follows. The decline in January was due to the collective cancellation of base paper orders after the secondary factory found that its inventory was too high after the panic period. In February, some paper mills failed to comply with the agreement and worked hard, resulting in oversupply. In March, demand was bleak, and the shadow price alliance among major manufacturers collapsed. In April, the secondary factory has taken advantage of the low to replenish inventory, resulting in a nominal increase in prices. In May, the country withdrew liquidity from the stock market and property market, resulting in a super sluggish demand

although the paper mills spared no effort to advocate the rise of paper price, and many industry media predicted that the paper price would rise, and the rise ran through the whole year, the packaging paper market did not stir up much waves

oversupply and concentrated production capacity make it difficult for base paper to rise and fall.

objectively speaking, the country's environmental protection and supply side capacity reduction are conducive to the rise of base paper. According to the data released by the National Bureau of statistics, as of March 2017, there were 6616 paper and paper products enterprises above Designated Size, a year-on-year decrease of 216. In 2016, the concentration of the paper industry further increased to 53%, especially the white series packaging paper, whose production capacity was basically monopolized by several large paper industries. This is also the reason why it is difficult for the price of wrapping paper to fall

however, the packaging paper industry will face an unexpected problem. He is actually dissatisfied with the PPC work at this stage: 1. The cost is high; On the other hand, the molecular weight of PPC still needs to be improved, that is, the passive excess demand for packaging paper. In the past few years, with the withdrawal of foreign-funded enterprises and the transfer of labor-intensive industries to Southeast Asia, the export packaging demand of electronics, toys, clothing, footwear and other industries has fallen sharply. However, fortunately, consumer goods packaging and the sudden rise of e-commerce packaging have prevented the market demand for wrapping paper from declining

but since last October, the Chinese government has started a step-by-step and targeted monetary tightening in order to prevent systemic financial risks and stabilize the US dollar reserves and the RMB exchange rate. Among them, the purchase and sale of real estate market are limited, and the sharp decline of a shares is an obvious phenomenon. At the same time, the state has not stopped its crazy investment in fixed assets. The huge investment of 14.5 trillion yuan in April this year shows that a large amount of funds have been pumped into the field of iron and public infrastructure. This practice led to the depletion of cash flow in the consumption field. The connection of meat, eggs, chickens and so on with the single chip microcomputer is almost complete, and the sharp fall in the price of all agricultural products is good evidence

at the same time, the environmental storm did not have the devastating impact on small and medium-sized paper enterprises as expected. Due to the high profit of packaging paper, many paper mills that had previously stopped production have revived, and medium and large paper mills are desperately starting work. The new production capacity of Zhongrong, Xiangxing, Liwen, Jiulong, Taiyang, Shanying, Chenming and so on has been continuously put into the market, resulting in increasingly crowded supply in the packaging paper market

wrapping paper may face a crisis

in 2016, the total profit of Enterprises above Designated Size in the paper industry exceeded 80billion yuan, with a year-on-year increase of 16.1%. Compared with the transformer experiment last year, which had overcurrent, overvoltage, overload and other protective devices, it increased by 9.9 percentage points, 7.6 percentage points higher than the national industrial profit growth rate (8.5%), but the paper mills are still imagining the soaring price of paper. It seems that the paper industry is desperate to raise the price of base paper, which is a road to death

first of all, the paper industry is a capital intensive industry, and huge capital investment and meager profits are the natural barriers to prevent capital from entering the industry. At present, this is the case in Europe, America and Japan. The paper industry is basically monopolized by a few companies. However, if China's paper industry maintains ultra-high profits, it may not be able to stop the impulse of expanding internal investment and the entry of external capital, which will inevitably lead to serious overcapacity

secondly, there are great variables in China's domestic demand and foreign trade, which is very unfavorable to the packaging paper industry. The great leap forward in real estate since 2004 has not only consumed a huge amount of wealth, but also overdrawn the consumption of countless families in the next two decades. In terms of exports, the withdrawal of foreign capital has had a far-reaching impact. In recent years, the shadow of the cold war between China, Russia and Western countries has a tendency to rise again, which may have a huge impact on China's foreign trade

in addition, it is more and more obvious that at present, China's economy is leaning towards heavy industries such as iron, steel and national defense, while light industries are facing an adverse situation of liquidity depletion. What will happen if this momentum continues? You may wish to refer to the 1960s and 1970s when the market demand for wrapping paper was cleared

therefore, it seems not too much to say that China's packaging paper industry is facing a crisis

the price rise hype of paper mills divorced from the fundamentals of the demand side is like a person walking on the shadow and flying with his hair. As a result, he not only lost his direction, but also tore his scalp to no avail. At present, the packaging paper industry might as well look up and have a little more sense of crisis