Packaging / Advertising & Office

According to Huacheng's import and export data observation report, in 2022, the profits of the pulp and paper industry chain will be concentrated upstream, and pulp prices will remain high. The main logic is that the supply of coniferous pulp will decrease, while the domestic paper production capacity will be heavily invested in wood pulp to increase demand. From the perspective of supply and demand of coniferous pulp alone in 2023, this situation may have eased but has not yet ended. After the addition of new production capacity, the supply and demand of broadleaf pulp will further relax, alleviating the contradiction of tight supply of coniferous pulp. It is expected that the average spot price of domestic coniferous pulp in 2023 will be 6400/ton, a decrease of 10%, and the operating range will be 5800-7500/ton. In terms of influencing factors and operating rhythm, we will focus on overseas supply in the first half of the year and domestic demand in the second half of the year, and the focus may gradually shift downwards, The main bearish news comes from overseas markets.

There is an increase in supply, and the two broadleaf pulp projects of Arauco and UPM are scheduled to be put into operation one after another and are expected to gradually reach production. However, the new production capacity of coniferous pulp is far less than that of broadleaf pulp, and a series of "bizarre" events overseas in 2022 indicate that the supply side of coniferous pulp is complex. Therefore, in 2023, we still need to be cautious of supply disturbances, especially in the transportation and raw material ends. It is expected that there will be an increase in supply, but the magnitude remains to be observed, Domestic import increment or overseas diversion.

According to the observation of Huacheng's import and export data, there is expected to be a differentiation between domestic and foreign demand in terms of demand. The strong external demand is no longer strong, and the decline in demand will continue until the third quarter. China's finished paper exports and European pulp demand will both decline. There are two aspects to domestic demand. Firstly, the demand for wood pulp is still steadily increasing. In 2023, there will still be more production capacity for cultural paper and white cardboard in China to support the demand for wood pulp; The second is the lack of active replenishment demand in 2022, which may improve. The low opening rate of manufacturers in 2022 is due to the imbalance between supply and demand of finished paper and poor profits of paper mills, leading to a decrease in pulp stocking or speculative demand.

The domestic demand for finished paper in 2023 is expected to improve. Firstly, from the perspective of consumption capacity, in the first 11 months of 2022, the savings of the residential sector increased by 14.9 trillion yuan, reaching a historic high. According to a survey conducted by the central bank, residents' willingness to save increased to 58%, while the proportion of planned consumption decreased to 23%. The epidemic and other uncertain factors have led to a significant decrease in residents' willingness to consume, resulting in a significant increase in savings. However, the negative impact of the epidemic and economic downturn has weakened, The savings accumulated by residents are expected to be released; Secondly, from the perspective of consumer willingness, the transformation of epidemic prevention policies is expected to gradually restore social vitality. At the same time, under policy stimulus, the real estate industry may gradually bottom out and improve, and the probability of the domestic economy bottoming out, stabilizing, and strengthening may increase, which may stimulate the situation and increase consumer willingness. According to observation reports from Huacheng Import and Export Data.

From the perspective of valuation, pulp is at a historical high, and pulp is more likely to be a post cycle commodity. It is expected that the major risk in 2023 will come from the weakening of overseas economy and the decline of demand. However, the difference in the concentration ratio of the industrial chain will still give pulp an advantage in pricing. Therefore, the downward range of valuation should still be carefully predicted. The decline of pulp valuation may be completed in the form of time for space, Huacheng Import and Export Data Observation Report.

From the domestic supply and demand balance table of wood pulp, the growth rate of supply and demand in 2023 may not differ significantly, with supply increment slightly higher than demand. Huacheng Import and Export Data Observation Report.