Packaging / Advertising & Office

With eight consecutive declines in waste paper and 50-150 concessions for base paper, the paper market is still strongly restrained by the lack of demand. However, a black swan has arrived, and "dual energy consumption control" has become the biggest variable. The limited production capacity has caused energy prices to rise. In addition, the production capacity of industrial raw paper is restricted, and the time window for paper price reversal is approaching.

【Raw materials】

The price of waste paper recycling has fallen for 8 consecutive days. On September 19, 2021, paper companies such as Nine Dragons continued to reduce the price of waste paper recycling by 30 yuan/ton.

Recently, corrugated paper and boxboard paper generally have a discount of 50-150 yuan/ton. On September 17, the Corrugated Paper Commodity Index was 127.73, a decrease of 0.57 points from the previous day, a decrease of 29.41% from the highest point in the cycle of 180.94 points (2017-10-18), and a decrease of 96.14 points from the lowest point of April 9, 2017. An increase of 32.86%.

On September 16, the white cardboard commodity index was 132.73, which was the same as the previous day. It was down 34.94% from the highest point in the cycle of 204.00 points (2021-04-28), and it was up from the lowest point of 98.00 points on September 19, 2019. 35.44%.

It has been five years since the paper market has been changing, and the price of paper will rise against the market next week.

【Packing order】

Although the decline in residents' income has been reflected in many aspects, such as the sharp decline in car sales and the decline in the consumer retail index, consumption is not without a bright spot.

Due to the impact of the epidemic in Southeast Asia and other regions, a large number of furniture and textile orders have returned to the country, increasing the demand for packaging.

In September, a series of activities of "promoting consumption and expanding domestic demand" were successively launched across the country, which will surely have a certain stimulating effect on demand in the short term.

These factors are conducive to preventing the consumption cliff, but rising prices and increased infrastructure investment are not friendly to consumption, and the subsequent prospects are not optimistic.

【Macroeconomics】

Social retail sales in August increased by 2.5% year-on-year, a sharp drop of 6 percentage points from last month's 8.5%, which fell short of market expectations. From January to August, social retail sales increased by 18.1% year-on-year, a drop of 2.6 percentage points from January to July.

Entering the second half of the year, domestic economic recovery is facing new conditions, such as mutant viruses, soaring commodity prices, and extreme weather. The dual control of energy consumption stimulates the price increase of raw materials, or is further transmitted to the consumer end, and rising prices will accelerate the suppression of consumption. Can't help but sweat for the consumer industry and the packaging industry that is closely related to consumption.