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In the first year of "Double Carbon", the price of raw materials for papermaking and energy shortages are intensifying, disrupting the pace of production and operation of many papermaking enterprises, and have to spend more money and energy to solve cost digestion and supply guarantee. How the papermaking industry can survive the current situation "Life and death"? In the new situation, companies need to upgrade cost management to a strategic level.
In 2021, the overall production situation of the paper industry is improving. From January to August, the national paper production reached 90.211 million tons, a year-on-year increase of 12.8%, which is the best performance in recent years. The good performance of the paper industry is closely related to the overall recovery of the national economy.
As representatives of enterprises in the industry, the performance of listed papermaking companies can be seen, and some companies have exceeded expectations. According to the semi-annual report data, the 26 listed A-share papermaking companies have all achieved profits, of which Sun Paper has the largest net profit of 2.232 billion yuan. Twenty-three companies achieved positive growth in revenue, and three of them had revenue of more than tens of billions in the first half of the year.
However, the overall improvement of the industry cannot solve the contradiction between skyrocketing costs and rising prices. According to statistics from the National Bureau of Statistics, the purchase price index of wood and pulp in August 2021 (100 points in the same period last year) reached 104.6 points, and the producer price index of the paper and paper products industry reached 104.3 points, both in the past 3 years. The highest value.
An analysis of the cost composition of papermaking companies found that the cost of raw materials is about 70% to 80%, and the cost of energy is 10% to 15%. The two cost components together account for about 90% of the total cost of the company. And now there are problems with the supply of raw materials and energy security. Although paper companies have been struggling to survive under the high pressure of environmental protection, how to solve the thorny problem of the new "dual carbon" requirements has become the key to whether paper companies can survive the life and death.
Waste paper currently accounts for 60% to 70% of China's total papermaking raw materials, and the ban on waste has a profound impact on domestic waste paper prices. In terms of historical trends, 2017 was the first year of the ban on waste. The price of waste paper doubled that year and adjusted in the following two years. The price of waste paper began to rise again in the second half of 2020. At the same time, the impact of the epidemic from 2020 to the present on the price of waste paper is very obvious, and it has exacerbated the fluctuation of domestic waste paper prices. Up to now, the price of waste paper is still rising, approaching the highest value in 2018.
Commodity pulp is also experiencing a price increase cycle. Commodity pulp prices have risen very rapidly starting from the end of 2020. In January 2021, the prices of bleached hardwood pulp and softwood pulp are about 3,700 yuan and 4,400 yuan per ton, until March It skyrocketed to 6,100 yuan and 7,300 yuan, or about 3,000 yuan in just three or four months. The pulp price adjusted in the second half of the year, but it was also higher than the price level of the previous two years.
Imported waste paper pulp is a new raw material composition that emerged after the waste ban. Only a small amount of imports have been made in 2017, but the number of imports will increase sharply to about 2 million tons by 2020. According to customs data, the volume of waste paper pulp imports in 2021 will be renewed. Create a new high. The import price of waste paper pulp is also going through a cycle of fluctuations. The price reaches the bottom in 2020 and will start to increase again in 2021, with an increase of close to 20%.
The prices of all paper-making raw materials are at a high level, which has greatly increased the cost pressure of paper-making enterprises, and is constantly eroding and digesting the profits obtained by enterprises. Rising prices of raw materials have a greater impact on small and medium-sized paper companies. According to market feedback, some small paper companies are already facing certain difficulties in their production and operation.
The current energy crisis is sweeping the world, prompting many energy prices to rise sharply, and Asian LNG prices have risen nearly six times in the past year. International oil prices have also soared rapidly, reaching their highest level in three years. Domestic coal prices have risen continuously, and futures prices have soared by more than 45%.
China is reappearing "electricity shortage". Since September, many places across the country have issued policies on curtailing and staggering electricity consumption, and the impact on paper companies has been very obvious. According to feedback from some companies, since 2021, with the implementation of the national “ban on scrap” policy and the “dual-carbon” measures have begun to be tested under the local government’s power curtailment policy, some companies have faced steam production caused by power plant shutdowns or production cuts. The problem that Hedian is difficult to guarantee.
The tight electricity supply caused by coal price increases has caused fluctuations in the electricity market and exposed deep-seated energy problems in the paper industry. Due to the "two highs" attributes of the paper industry, as some regions strictly implement the central requirements and strictly control the "two highs" projects, the paper industry will once again undergo a round of elimination and reshuffle.
For large enterprises with self-provided power plants, although the pressure on coal prices is relatively high, they can be digested internally, and the overall cost pressure is relatively low. What is more troublesome is that many small and medium-sized paper companies have to temporarily purchase natural gas boilers or purchase online power in order to solve the immediate difficulties. And these increased costs basically consumed the profits of the company in the first half of the year.
The root cause of this energy crisis is energy shortage caused by the imbalance between supply and demand. China’s economy has recovered significantly, and overseas demand has driven China’s exports to increase. Since the beginning of this year, China’s exports have continued to run at a high level, which has supported the domestic mid- and downstream manufacturing industry. Production demand has increased and energy demand has increased. The world is advancing the energy transition. In the first year of the implementation of China's "dual-carbon" target, the reduction of coal power has been intensified, and the gap in supply and demand protection has been intensified, leaving energy supply in a state of inadequacy. It is expected that the problem of tight structural supply will continue for two to three years, and the energy crisis will hardly be significantly improved in the short term.
The competition among enterprises is embodied in price competition, and in the final analysis is cost competition. In recent years, the corporate environment has undergone tremendous changes, extending from manufacturing costs to product life cycle costs, resulting in cost management becoming a key condition for the survival of enterprises. Paper companies must pay attention to cost management if they want to achieve a differentiated competitive strategy.
This round of rising cost factors has intensified, highlighting the importance of cost management. Due to the rapid increase in upstream raw material prices and energy prices, huge pressure has been placed on paper production. According to exchanges with paper companies, many companies’ operating costs in 2021 will increase by 40% to 50% year-on-year. In the difficult choice of sustained losses or short-term reductions, some paper companies have issued notices of production suspension.
Judging from the consumption situation in domestic and foreign markets this year, the demand for papermaking is still growing, and the suspension and reduction of production have increased the contradiction between supply and demand in the paper market. Coupled with the increase in costs caused by the sharp rise in raw material and energy prices, it is difficult for companies to tap the internal potential to improve production efficiency and it is difficult to absorb the pressure of rising costs. Paper price increases have become an inevitable choice for paper companies, and they have begun to be transmitted to downstream industries.
Around the National Day, many paper companies announced price adjustments. Some companies' packaging paper increased by 100 yuan per ton, and individual corporate cultural paper increased by 300 yuan per ton, and there are plans to continue to increase prices. In the price increase letters issued by many paper companies, most of the price increase factors are concentrated in the cost of raw materials such as waste paper and waste paper pulp, energy costs such as coal and electricity, transportation costs such as transportation and shipping, and the cost of chemicals such as caustic soda.
Under the new market competition environment, the differentiation of papermaking enterprises' production and economic operation has become increasingly prominent. Enterprises with pulp raw materials and self-provided power plants have improved economic benefits, but papermaking enterprises relying on outsourcing have increased difficulties and the number of loss-making enterprises increase.
China’s current economy continues to be stable, but the energy crisis has spread to the world. Quantitative easing in some countries has led to inflation and continued to push up commodity prices. In addition to the gradual implementation of China’s “dual carbon” goal, the increase in paper prices brought about by high costs will be in the future. For a period of time.
At present, the relevant departments have taken measures to stabilize the prices of bulk commodities, and the speculation factor has weakened. However, improving the ability to withstand pressure is the key to a company's survival and standing out. Paper companies need to attach great importance to cost management, strengthen supply chain management, ease price transmission, promote the connection of production and sales, and ensure basic operations.
