Source: Chuan Cai Securities How to price the paper products industry in China? The pricing of China's paper industry can be based on the cost plus method. In general, 1 to 1.2 tons of waste paper is required per ton of wrapping paper, and 1 ton of pulp is consumed per ton of cultural paper. Raw materials account for about 70% of the cost of paper products. In general, the paper industry has a short production and inventory cycle, and the correlation between raw materials and finished product prices is high. In 2017, China consumed a total of 78.96 million tons of waste paper raw materials. About 2/3 of the waste paper came from China. The waste paper was mainly domestically priced. In 2017, China's wood pulp consumption was 31.52 million tons, of which domestic consumption was 10.4 million tons. Imported 21.12 million tons, the self-sufficiency rate of wood pulp is 34%, the import dependence is higher, and the pulp price follows international fluctuations. Why is the industry in the downtrend channel in 2018? The supply of raw materials is orderly, the downstream demand is insufficient, and the profitability of the company is weakened. Waste paper: The supply end of the supply end of 2018 increased the frequency of waste import approval, the total amount decreased, but the distribution is more reasonable, there are still remaining quotas at the end of the year, alleviating market panic; demand downstream of the packaging paper industry is stable, demand increase limited. Pulp: Due to the lack of demand for paper products this year, the pressure on corporate profits has led to lower operating rates and reduced demand for raw materials. As the traditional consumption season in the fourth quarter, manufacturers have always had a tradition of stocking. This year, pulp shipments are not smooth, resulting in high inventory, which leads to The price of pulp began to fall in the fourth quarter. How to look at the cost trend of the paper industry in 2019? Supply and demand are tight, and the price hub still has room to move up. In terms of waste paper: the supply-side import policy will continue to be tightened. It is expected that the foreign-invested import quota will be reduced by more than 30% next year. By 2020, foreign-made waste imports will be completely banned. The increase in domestic waste paper is limited, and the recovery rate is unlikely to increase significantly in the short term. Due to the relatively mature development of the packaging paper industry, the increase is limited, the supply and demand structure is tight, and the raw material gap is about 7 million tons. Pulp: On the supply side, the concentration of large-scale overseas pulp enterprises will be improved, and the price of pulp can be stabilized by controlling the rate of production. It is expected that the new capacity will not exceed 1.5 million tons in 2019. On the demand side, the demand for pulp mainly comes from household paper. The incremental demand and the alternative demand for waste paper, the total new demand is about 2 million tons. In the short term, it will be dominated by destocking. There is a certain downward pressure on the pulp price. In the medium and long term, the global supply and demand are tightly balanced. The pulp price center is expected. Smooth, insufficient kinetic energy. How to invest in the new pattern of paper cost? Pay attention to the leading enterprises in the packaging paper industry with external waste quotas and superior cost; pay attention to the paper products enterprises with good growth rate of downstream demand and short-term cost reduction and long-term stability. Editor in charge: Miao Rong 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:// Other Trapping Products,Bird Feeders,Box Traps,Animal Snares Hebei Liebang Metal Products Co.,Ltd , https://www.lb-animaltraps.com