Packaging / Advertising & Office

Just now, a blockbuster news that could affect the pattern of the paper industry came! The State Council has made major policy adjustments, and the import of raw paper and other paper products are not on the restricted list! This policy adjustment is conducive to calming the crazy price of paper, and can even solve the difficult situation of exporting one cabinet.

The Ministry of Commerce and the General Administration of Customs issued Announcement No. 12, in order to support the development of processing trade and stabilize the supply chain of the processing trade industry chain, starting from June 15, 2021, processing trade enterprises will import paper products (tax headings 4801-4816) to process export paper Products (tax headings 4801-4816) are no longer included in the catalog of prohibited commodities for processing trade.

The adjustment of this policy is undoubtedly a booster for the packaging and printing industry, which is at risk due to weak domestic demand and skyrocketing raw materials.

Let's take a look at the background of this policy.

In the past five years, raw materials such as boxboard, corrugated paper and white cardboard have changed from the stable situation in the past. The prices have fluctuated up and down, and the ups and downs have caused great troubles to the middle and lower reaches of the industry. It can even be said that the disaster is serious.

The adjustment of this policy will help stabilize the fluctuation of paper prices, and it is also good news for many end industries that need to purchase a large amount of packaging materials. Since the logistics and tax costs of imported paper are as high as 700-900 yuan/ton, the impact on domestic paper will not be great. But once the price of domestic paper goes up wildly, imported paper will flood in, playing a role in stabilizing prices.

However, in order to suppress raw paper imports and obtain stable profits, domestic paper giants are likely to suppress national waste and pulp futures. Therefore, this policy is negative news for waste paper packers and futures speculators.

In 2020, my country’s total printed matter imports and exports totaled US$14.099 billion, a decrease of US$2.224 billion compared with the same period last year, a year-on-year decrease of 13.62%; of which imports were US$2.516 billion, exports were US$11.583 billion, and the trade balance was US$9.067 billion. Similarly, in 2020, my country's total export of pulp, paper and their products was 145.6 billion yuan, a year-on-year decrease of 4%. In order to stabilize the basic export market, policy investigations can be described as timely and effective at this time.

There are 400,000 packaging and printing companies in China, of which more than half of the paper packaging and printing companies have solved the livelihoods of millions of families. The adjustment of the restrictions on the import and export of paper products will undoubtedly be of great help in stimulating the development of this industry.

In fact, the removal of import restrictions on paper products may have an unexpected effect on the current dilemma of exporting a box of hard-to-find products. Although the number of my country's export containers in 2020 has fallen by 18% compared with 2019, and in 2019 it has fallen by 29% compared with 2018, foreign trade companies have encountered the phenomenon of "a box is hard to find".

A major factor is that after China's foreign waste imports are zeroed out, there is no major return channel for containers.

Take Nine Dragons Paper as an example. In February 1990, Nine Dragons Zhang Yin began to expand its waste paper recycling business in the United States and established Zhongnan Holding Company. Not only is there a wealth of waste paper resources, but the waste paper recycling system is extremely efficient and scientific. Careful Zhang Yin found another golden opportunity-a large number of containers transporting export goods were returned empty when they returned to China. She transported US waste paper to China at very low freight rates. In the past 10 years, Zhongnan has successively established 7 packing plants (packing the received waste paper) and transportation enterprises in the United States. In 2002, Zhongnan Company became the company with the largest volume of container exports in the United States. Later, the annual shipment of Zhongnan Company exceeded 5 million tons. These goods were transported in 200,000 standard containers, accounting for a quarter of China's imports of recycled paper raw materials.

In other words, before the ban on the import of foreign renewable resources, 800,000 cabinets were transferred back to China in this way every year. Now it is all gone, causing the original ecological imbalance of the container cycle.

Once the import of paper products is liberalized, paper packaging companies can not only obtain cheap and high-quality imported raw materials, but also directly connect with overseas customers. It is also conducive to the return of export containers to ensure smooth foreign trade.

For domestic packaging and printing companies, this historical opportunity should not be missed!