Packaging / Advertising & Office

1. Raw materials

Last week, the paper giants also carried out four consecutive rounds of corrective downward adjustments to the price of domestic waste. On July 7th, Nine Dragons Paper, the leader in container board and corrugated paper, announced an increase of 50 yuan/ton. From the actual transaction point of view, this price increase is difficult to land. At present, Hailong brand tile paper is above 4100, and Nine Dragon brand tile paper is above 4200. Compared with imported tile paper, the price is still high. During the same period, the price of imported high-strength corrugated paper from Shanghai Rongchuang was between 3400-3700. Considering that the market is sluggish and paper mills are under increasing inventory pressure, in the coming week, it is not ruled out that the situation of national waste and base paper flash drop.

At the end of June, the white cardboard giant announced a floor price of 7,010 yuan, and a guide price of 7,210 yuan/ton in July. However, due to insufficient demand and lack of prestige among paper mills, few white cardboard dealers responded. On July 9, 2021, the price of Chenming 230g-400g white cardboard sold by a company in Wuxi was about 6,710 yuan/ton, far below the guide price of 7210. The social stock is too large, and the paper giants and distributors do not trust each other, which may affect the future trend of white cardboard.

This week, the domestic polyethylene PE market rose and then fell back, with a weekly increase or decrease of 50-200 yuan; the PP market fluctuated and weakened, with some brands rising and falling within the week of 30-200 yuan/ton; PVC fluctuated, and the price was basically stable . The downstream is in the traditional off-season, demand is sluggish, and the export window is almost closed. There are many negative factors. It is expected that prices will remain weak next week.

2. Packing order

In June, the scissors gap between CPI and PPI was still as high as 7.7%, indicating that the demand was too weak and the upstream raw material prices could not be transmitted to the consumer end. As strong upstream raw material manufacturers still insisted on raising prices, more and more packaging and printing Companies are in a situation of "doing more and losing more", and some companies choose to give up taking orders.

Of course, there is no lack of positive factors in the market. In June, the M2 growth rate was as high as 8.2%, and the central bank released 1 trillion yuan. Although there will be great concerns in the long term, it will help maintain the stability of the consumer market in the short term. The hot weather has spawned an increase in orders for home appliances, food, etc. for relieving heat. It is expected that domestic demand packaging orders in various industries will remain weak next week. After the vaccine’s role was verified during the European Cup, European and American countries, led by the United Kingdom, announced that they would no longer implement epidemic prevention measures and treat COVID-19 as influenza, indicating that industrial workers in European and American countries will return to work and China’s export orders will increase. Continue to fall quickly.

According to the latest statistics, my country’s total household debt is 200 trillion yuan, and young people’s debt is very serious. Statistics show that China’s 900 million labor force and 800 million people are in debt, while young people choose not to fall in love, not to marry, or to have children, which has a huge impact on consumption. In the long run, the overall packaging orders will shrink in the future, and packaging companies must explore new profit growth points.

3. Macroeconomics

On July 9, the National Bureau of Statistics released the CPI and PPI data for June. PPI rose 8.8% year-on-year, and CPI rose 1.1% year-on-year. The scissors gap between the two was still as high as 7.7%, consistent with the historical high in May. This shows that the upstream raw material prices can no longer be transmitted to the downstream, and the packaging industry in the middle reaches is in a worrisome situation. Under this circumstance, the higher the upstream price increases, the weaker the downstream purchasing will, and consumption may fall into a vicious circle.

On July 9, the central bank announced a one-trillion-dollar RRR cut policy, which can be called a comprehensive RRR cut. However, it is almost impossible for this trillion in liquidity to flow to the manufacturing industry that “does a lot of money”, let alone consumers. Therefore, this trillion is likely to flow to the real estate field, or become hot money for hype raw materials again. , We will wait and see.

Throughout the second quarter of 2021, the Fed's cumulative reverse repurchase amount exceeded 20 trillion, an increase of 4400% over the first quarter, equivalent to 3 trillion U.S. dollars, and the U.S. currency increment in 2020 totaled 11 trillion U.S. dollars. The recovery of the U.S. dollar will deal a heavy blow to the currently speculated prices of oil, pulp, and plastic futures, which will help the prices of raw materials return to a reasonable range. At the same time, Americans will no longer spend money on the Fed's quantitative easing. At the same time, the stock market bubble burst and Americans' wallets are damaged, which is quite detrimental to the exports that China relies on.