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| Overview on Chinese Papermaking Industry in Q1 of 2009 |
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http://www.paper.com.cn
2009-05-05 |
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Marked improvement had been achieved in Chinese papermaking industry in the first quarter of 2009 compared with that in the fourth quarter of 2008. A total loss existed in Chinese papermaking industry in the fourth quarter of 2008. After entering 2009, most enterprises had kept balance in the profits and losses in February except that
some enterprises were still in
loss in January. Many enterprises began to make profits in March. In general, most scaled enterprises had kept balance in the first quarter; some enterprises had made considerable profits. Certain gap needs recovering year on year compared with the previous years, but from the aspect of link relative ratio, the papermaking industry had made significant progress regardless of monthly or quarterly.
In the first quarter of 2009, many companies' inventories in the high price period of 2008 had been basically absorbed, and the operation rate of the existing machines returned to the normal level. In the first quarter of 2009, the accumulative yields of Chinese machine-made paper and paper board were cut down by 0.21%, which were grown positively in February and March, having been reversed the decline trend year on year since May of last year.
The papermaking industry is in the middle and back end of the economic cycle, whose raw material industry determines its close relationship with the downstream consumption. For example, the bond paper and the newsprint paper are greatly affected by the advertisement, and the packing paper is closely associated with the exports and consumption. Therefore, the papermaking industry was benefited little in this round of economic growth dominated by the government investments. With the steady increases at home and abroad, the demands for the paper are expected to boom. The industrial revitalization policies may play an indirect role in the exports, driving the demands for paper.
Due to the related policy supports, the credit loan environment in Chinese papermaking enterprises began to unloosen. In addition, the high price inventories of Chinese major papermaking enterprises had been absorbed gradually. The pulp price in Chinese market had been increasing. In April 2009, the respective offering prices of the coniferous pulp, hardwood pulp and CMP were 610 USD, 525 USD and 495 USD per ton, increased by 29USD, 14.6 USD and 7.3 USD respectively. The wood pulp prices had begun to emerge from the bottom. It was reported that the global two major pulp producers, Arauco of Chile and Ilim Group of Russia, had announced they would enhance the prices for Chinese papermaking enterprises from 1st April 2009. Arauco Company would increase the BSKP price by 10 USD to 480 USD per ton. Ilim Group would increase the BSKP price by 30 USD to 450 USD per ton of the effective price delivered in the borders; the BHKP price will be increased by 20 USD to the effective price of 390 USD per ton delivered in the borders. The pulp price increases would result in the price growth of the paper products.
Because of the depression of the global economy, the price of the imported American waste paper in Chinese market was rapidly dropping from August 2008, in which the price of the 8# waste paper was cut down to the minimum of 100 USD per ton, down by two thirds compared with the highest price during the year. From February 2009, the prices of Chinese domestic various papers were increasing steadily, propelling the price growth of the major imported waste papers in different degree. China mainly imports the waste papers from America, Europe and Japan, which accounts for 44%, 28% and 16% respectively of the total imported waste papers, totally occupying 88%. The price growth rate of the 8# waste paper was raised by 15% in the first quarter of 2009 as well as 10% growth for the 11# waste paper. Generally speaking, the prices of the imported waste papers will be increased gradually because of the huge demands for the waste papers in China and the economy returning to normal.
In the first quarter of 2009, the prices of the major papers in Chinese market were cut down by 5% at average. The price reduction in the paper products did not mean the further deterioration in Chinese papermaking industry. The major reason for the decline was the price reduction in the raw materials and the recovery of the operation rate in Chinese papermaking enterprises, which jointly propelled the slight decline price in the finished paper products. At present, the relationship between the raw material market and the finished product price has been stabilized. It is predicted that the price of the finished paper products will not continue to decline.
Under present economic and social environments, Chinese papermaking industry not only faces the difficulties of how to overcome the strikes from the international financial crisis, but also faces long term challenges. The increasing demands for the papers in China, the raw material supply shortage and the dual situations of developing economy and environmental protection make Chinese papermaking industry have to find out a sustainable development road. From 1st May 2009, Chinese new environmental protection regulations will be implemented. On that occasion, the costs of the papermaking enterprises will still increase and some medium and small enterprises will be knocked out the market.
By the end of April 2009, all Chinese listed papermaking enterprises made their financial statements publicly. Viewing on the present published information, the major problems of Shandong Bohui Paper Co., Ltd lie in the encumbrance from the successive price declines of the cultural paper and cigarette packaging paper. Poor achievements have made in Yueyang Paper Co., Ltd and Shandong Chenming Paper Group Co., Ltd, resulting from the self-made pulp unable to exert the advantages, the stopped pulp lines unable to take effect but add the costs and expenses and sharp reduction in the major businesses. Due to the steady downstream cigarette market and benefits from the significant decline in the pulp price, Mudanjiang Hengfeng Paper Co., Ltd attained significant goals. |
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