Packaging / Advertising & Office

On September 25, downstream orders still fell into misfortune, but the upstream price hikes came with lightning speed.

In one day, Shanying, Century Sunshine, and Nine Dragons issued price increase letters one after another, and the upward trend seemed unstoppable.

Century Sunshine: Due to the continuous increase in raw material prices, the price of coal is the highest in history. From September 25, the corrugated base paper has risen by 100 yuan/ton. This price increase was obviously implemented immediately, and there was no respite from downstream.

Shanying Paper: Because the cost of raw and auxiliary materials such as national waste, waste paper pulp, and coal remains high, the impact of regional epidemics and dual control of energy consumption is superimposed. Although the company strives to tap the potential to improve production efficiency, it is still unable to absorb the pressure of rising costs. Starting from September 25, it was decided to raise 50 yuan for yew and silver fir, 100 yuan for sequoia, T paper, and Gaowa, and 200 yuan for spruce and metasequoia. Starting from October 8th, all wrapping paper will rise by 200 yuan. The quotation is also executed immediately.

Nine Dragons Paper: Two consecutive price increase letters were issued within two days. Today's price increase letter is the first official letter with a red seal in many years. This additional price increase letter is based on the general increase of 100 yuan/ton on all raw paper starting from October 9. This letter of price increase seemed to echo Shanying Paper. The price increase was delayed by one day, and the price increased by one hundred. The invitation for the order was quite obvious.

The price increase of the paper mill is due to the substantial increase in various costs. This is undoubtedly, according to the current situation of dual control of energy consumption, follow-up production is really likely to be disrupted for a long time.

However, the paper packaging industry at the waist need not be too flustered. This wave of price increases is fierce, but the orders are indeed bleak, and orders will be even thinner under dual control. In addition, the inventory of paper mills and traders remains high. There is no basis for long-term sharp rises.

Faced with today’s market conditions, short-term operations may wish to be as follows: For companies with surplus orders and funds, they may wish to start first, start at a low price to ensure delivery, and then wait for the price of paper to fall; factories with few orders may wish to simply lie down and wait until the paper arrives. Operate again when the price returns to its original shape.

In the medium and long term, uncontrolled (hyperinflationary) price increases will inevitably lead to a cliff-like decline in demand. For upstream raw material manufacturers, it is tantamount to gouging meat to repair sores. Therefore, judging from the price increase letter of Nine Dragons, we may not be able to see the 100 yuan price increase on October 9th, because the industry leader Nine Dragons hopes that the market will continue to be stable and far-reaching.

However, we should also see that the continued loosening of currency, the guidance and control of public opinion, the trend of coal prices, and the flow of capital all indicate that the top-down renminbi-denominated materials will continue to rise sharply. At this time, How to reconcile with the ups and downs really tests the wisdom of business operators.

The rise is long-term, the big rise is high probability, the challenge is huge, but the future must be bright! When the market economy plays the role of an invisible hand and pushes a large number of companies out of the game, the rest are kings.