How long can white cardboard rise after raising prices four times in half a year and accumulating 1600 yuan?

 How long can white cardboard rise after raising prices four times in half a year and accumulating 1600 yuan?

The price of white cardboard has risen for the fourth time since the second half of this year.

The company will also raise the prices of all series of white cardboard products, such as cigarette packs and food products, on November 26. The company is a joint venture of Sun Paper (002078. SZ).

In addition, app of Jinguang group will raise the price of white cardboard on December 1. The increase of the two paper mills was also 300 yuan / ton.

White cardboard is a kind of thick and firm white cardboard made of pure high-quality wood pulp. It is mainly used to print business cards, invitation cards, certificates, trademarks and packaging decoration.

According to the use, white cardboard can be divided into social white cardboard, food white cardboard and cigarette pack white cardboard. The social white card paper is mainly used for packaging boxes of drugs, daily necessities and snacks, which is the most commonly used white card paper; the food white card paper is mainly used for liquid packaging boxes and food boxes such as fresh milk and yogurt; the cigarette packaging white card paper is mainly used for carton packaging of cigarette products.

Since this year, the price of white cardboard presents a V-shaped trend.

In April, affected by the new crown epidemic, the price of white cardboard began to fall sharply. According to data from Zhuo Chuang information, the average price of white cardboard fell to the lowest level in the year, at 5176.79 yuan / ton.

After June, with the gradual control of the domestic epidemic situation, the enterprises returned to work smoothly, and the downstream demand for white cardboard increased. In the middle and late August, under the leadership of Chenming Paper Co., Ltd., Jinguang group and Sun Paper Co., Ltd. raised the price of white cardboard products one after another, with the price increases of 500 yuan / ton.

At the end of September and the beginning of October, Chenming Paper and Jinguang group announced to increase the price of white cardboard by 300-500 yuan / ton.

On October 22, Chenming Paper Co., Ltd., Bohui Paper Industry Co., Ltd. and wanguotaiyang Co., Ltd. issued price increase letters again, and the ex factory price of white cardboard increased by 300 yuan / ton.

So far, in the second half of this year, the price of white cardboard has been increased four times, with a total increase of about 1600 yuan / ton.

Affected by the continuous rise in paper prices, the stock prices of Chenming paper, sun paper and Bohui paper have continued to rise recently.

On November 24, Chenming Papers share price rose to 7.37 yuan per share, its highest level since April last year, up 34% from the beginning of the year.

The stock price of Bohui Paper Co., Ltd. rose to 16.53 yuan / share, the highest in recent 12 years, up 210.71% from the beginning of the year.

Sun Paper Co., Ltd. rose to 16.95 yuan / share on November 23, a new high in nearly ten years, up 60% from the beginning of the year.

Among the three listed companies, the white card business revenue of Bohui paper industry accounted for the largest proportion, accounting for more than 80%. From the financial report of the previous three quarters, the net profit growth of Bohui paper industry was also the largest.

In the first three quarters of this year, Bohui paper achieved a net profit of 527 million yuan, an increase of 284.72% year-on-year. The net profit of Chenming Paper Industry in the same period was 1.077 billion yuan, with a year-on-year increase of 0.82%; the net profit of sun paper industry was about 1.382 billion yuan, a year-on-year decrease of 6.93%.

Reasons for price increase

The price of white cardboard increased continuously, mainly because the resumption of work and production after the epidemic situation provided demand support.

Chenming paper industry told interface news reporters that white cardboard is mainly used for packaging high-end products. After the epidemic, the resumption of work and production in China has been promoted in an all-round way, and the market demand for white cardboard has accelerated to recover, which has led to the outbreak of demand in the white cardboard market.

At the same time, the second half of the year is the traditional peak season of the paper industry.

Zhao Zehui, a white card analyst at Longzhong information, told the interface news reporters that there were more festival consumption in the four seasons, including the Mid Autumn Festival, national day, double 11, Christmas, etc., and the need to prepare goods in advance for new years day and Spring Festival, and the demand for white cardboard increased.

In addition, white board paper production capacity decline, but also produced a part of the demand for white cardboard.

Fuyang district used to be a domestic white board production base, accounting for more than half of the production capacity. With the implementation of capacity cut-off in recent years, there are only six white board enterprises with a total capacity of about 1.05 million tons.

The Fuyang government plans to gradually replace the traditional paper industry with new industries such as advanced manufacturing and biomedicine due to high pollution and high energy consumption in the paper industry, Zhejiang Online reported.

As of the beginning of 2019, Fuyang district has shut down and demolished more than 300 paper-making enterprises, eliminated about 5 million tons of production capacity and reduced about 60% of paper production capacity, according to China paper industry network.

Zhaozehui told the interface reporter that according to the product grade produced by Fuyang current enterprises, the replacement capacity of white board paper is within 300000 tons. Due to the number of suppliers and paper cost, the end customers expect that it is difficult to replace white paper completely in the short term. However, in the long run, the consumption upgrading will drive the demand for white paper to increase.

Chenming paper also holds the same view. The company told interface news reporters that white cardboard has consumption attributes, and with the upgrading of national consumption, the application scope of white cardboard is expanding.

In January this year, the national development and Reform Commission and the Ministry of ecological environment issued the opinions on Further Strengthening the control of plastic pollution (hereinafter referred to as the opinions). This policy is a major upgrade of the previous plastic restriction order, so it is called the new plastic restriction order in the industry.

According to the opinion, by the end of this year, China will take the lead in banning and limiting the production, sales and use of some plastic products in some regions and areas; by the end of 2022, the consumption of disposable plastic products will be significantly reduced, and alternative products will be promoted; by 2025, China will gradually restrict and prohibit the use of non degradable plastic bags, disposable plastic tableware, hotels and Hotel disposable plastic products and express plastic bags.

Zhao Zehui told interface news reporters that the prominent areas of white cardboard replacing plastic products are mainly food and catering, including paper straws replacing plastic straws and paper lunch boxes replacing traditional disposable lunch boxes. Food card orders will increase the white card mill scheduling pressure, conducive to price increases.

It is estimated that by 2025, the scale of disposable plastic tableware in the field of domestic paper products replacing catering delivery is expected to reach 2.34 million tons, and the scale of non degradable plastic bags in retail fields such as super pharmacies, a paper substitute, is expected to reach 1.17 million tons, according to China Paper Industry website.

According to Oriental Securities research paper, Chinas white cardboard occupies nearly half of global production capacity. Due to the limited scale of overseas production capacity, the import volume of white cardboard in each month this year is stable within 4000 tons, and the impact of imported paper on the domestic white cardboard market is relatively small.

Oligarchy intensified

The high concentration of white card industry and the strong bargaining power of leading paper enterprises have also become an important reason for the next round of price rise.

According to the data of Zhuo Chuang information and paper industry lianxun, Chinas existing white cardboard production capacity is 10.34 million tons.

Among them, Jinguang group has the largest capacity of white cardboard, and the total capacity of its three subsidiaries is 3.5 million tons / year. The second is Bohui paper industry, which has a capacity of 2.15 million tons / year. The capacity of Chenming Paper and wanguosun is 2 million tons / year and 1.4 million tons / year respectively.

In September this year, the acquisition of 100% equity of Bohui group transferred by Jinguang group was completed. Jinguang group has become the actual controller of Bohui paper industry by directly and indirectly holding 48.84% equity of Bohui paper industry.

Zhai Jingli, vice president of kinglight group (China), told interface news reporters that the acquisition could form a strong alliance.

After the acquisition of Bohui paper industry by Jinguang group, the market share of white cardboard reached 51%, according to Oriental Securities research paper. Chenming Paper Co., Ltd. and Sun Paper Co., Ltd. ranked second and third respectively.

The white cardboard production capacity of these three leading enterprises accounts for about 80% of the total domestic production capacity, and the oligopoly pattern of the industry is further intensified.

Zhao Zehui told interface news reporters that the most direct impact of the increase in industry concentration is the substantial increase in the price of white cardboard.

China also reported that several white cardboard giants have a heavy voice and lack the willingness to compete in prices, making it easier to raise prices. Especially in the context of multiple favorable factors, it is of little significance for enterprises to seize the market through low prices.

Zhao Zehui said that in the long run, the improvement of industry concentration is conducive to the rapid expansion of industrial capacity. Up to now, the domestic white cardboard production capacity is planned to increase by 9.3 million tons, of which 1.8 million tons are expected to be put into production next year.

Guangxi Jingui pulp and Paper Co., Ltd., a subsidiary of Jinguang group, is also building a 900000 ton ordinary white cardboard production line and a 900000 ton food grade white cardboard production line, which is expected to be put into production in 2022.

Zhao Zehui said that in the next five years, the domestic white cardboard production capacity will reach 20 million tons, double the current capacity.

Oriental Securities research paper said that under the pattern of good supply and demand, the white cardboard price in the fourth quarter of this year will continue to rise, and the high price of white cardboard is expected to continue to the second half of 2021. Since then, the trend of supply and demand is directly related to the release rhythm of new capacity of white cardboard.