Packaging / Advertising & Office

The price increase of cultural paper has intensified from the outbreak of the domestic epidemic in March to the end of June. Within 4 months, a number of well-known paper companies including Chenming Paper, Sun Paper, and Huatai Paper issued five consecutive price increase letters, with a cumulative increase of 1,500 per ton.

Why do the prices of cultural paper rise frequently? Can the publishing and printing market bear the weight of paper prices? How will the paper price trend in the later period...

Five price increase letters were issued, with a cumulative increase of more than 26%. Why does the price of paper keep rising?

As the cultural paper market ushered in the peak bidding period for autumn textbooks in March, the price of paper was restless again. The letter of price increase from paper mills was sent intensively and rapidly, involving cultural paper products such as double-coated paper and coated paper.

It is understood that as of late June, paper mills such as Chenming Paper, Sun Paper, Huatai Paper, and Yueyang Linzhi have successively raised the price of cultural paper five times, ranging from 200 to 300 per ton each time. Compared with the average market price of 5,600 and 5,380 per ton of double-coated paper and coated paper from January to February this year, the cumulative increase has exceeded 26%.

In fact, the first round of price increases did not come suddenly. Luan Wenju, former deputy director of the Publishing Department of the People's Publishing House, said in an interview with reporters that since March, the bidding for autumn teaching aids in various regions has started one after another.

The publishing and printing industry generally believes that the trend of rising and rising is somewhat unreasonable. Sun Paper's decision to raise prices by 300/t since March 19, just 19 days after its first round of price increases. Chenming Paper also raised prices twice in March. Since then, in early April, early May, and mid-June, cultural paper production enterprises collectively raised prices again.

Analyzing the reasons for the continuous rise in the price of cultural paper, Zhuang Xiangqun, general manager of China Paper Federation (Shanghai) Business Consulting Co., Ltd. believes that cultural paper is a wood pulp product, which is mainly affected by the increase in pulp prices. "The price of pulp has remained high for a long time since the beginning of this year, and overseas hardwood pulp has risen by nearly 1,500/ton in 4 months, and the cost-driven impact has a greater impact." Zhuang Xiangqun said that supply-side incidents continued to occur in major international pulp producing countries, which also affected global pulp. supply.

The domestic and foreign epidemics also boosted the price increase at this stage. Xu Lisheng, executive deputy director of the Publishing and Printing Working Committee of the Beijing Printing Association and deputy general manager of the Chemical Industry Press, analyzed that on the one hand, supply chains such as overseas raw material imports were blocked due to the epidemic;

According to Wang Zhibin, general manager of Beijing Gaofu Commercial Trading Co., Ltd., the poor supply chain caused by the epidemic is an important "behind the scenes" for the continuous rise in the price of cultural paper. The first quarter financial report released by Chenming Paper also confirmed this. The announcement shows that due to the domestic epidemic, especially the regional epidemic in Shandong Shouguang and Jilin production base, logistics was blocked, affecting its shipment volume of about 150,000 tons.

The impact of the epidemic has made the industrial chain "worse", and the publishing and printing industry seeks "self-help"

Foreign pulp prices continue to rise, and domestic logistics are blocked due to the impact of the epidemic. Under the double "pinch attack", cultural paper manufacturers claim that price increases are helpless. However, in the chain reaction of price increases, the warehousing and delivery of books due to the outbreak of the epidemic have been blocked, and offline and online sales have been suppressed, which has made relevant companies in the publishing and printing industry chain "worse."

"The increase in the price of cultural paper has led to the continuous increase in the cost of the publishing and printing industry. Affected by factors such as the epidemic, the demand for cultural paper has shown weakness." Ding Yiwen, senior engineer of Hubei Printing Association believes that the continuous price increase of the paper industry disrupts the publishing price system , which naturally affects the decision-making, pricing and print volume of publishing topics. The information obtained by the association from Hubei printing enterprises shows that the printing volume of enterprises has dropped by 20%-30% since the beginning of this year. In addition, the price of ink, PS plate, hot melt adhesive and other consumables related to petroleum and metal has increased by 20%-30%, which has a significant impact on printing enterprises.

In the face of the letter of price increase flying all over the sky, publishing units and printing companies that have been "tired" by the frequent fluctuations in paper prices in the past two years have to seek "self-help" early in order to prevent problems before they happen. Luan Wenju told reporters that many publishing units have planned to increase paper stocks since the beginning of the year to counteract short-term price fluctuations.

"After the tumbling and rising paper prices in 2021, publishing units have gradually explored some ways to deal with fluctuations in paper prices, including adjusting book prices, adjusting the type and grammage of book paper, centralized purchasing and moderately increasing stocking when paper prices are low. Flexible paper preparation, etc." Xu Lisheng said that these measures set aside cost space to cope with the rise in paper prices and alleviated the impact of periodic paper price fluctuations on book costs.

The above is just a short-term "emergency" for publishing and printing units as a last resort, and the market has a strong wait-and-see atmosphere. Lou Shengli, general manager of Hebei Wenxuan Trading Co., Ltd., analyzed that although the price of paper is transmitted downward, the publishing and printing units are basically supplemented by just-in-demand. Paper-using companies such as publishing and printing units stocked up in stages in advance, and the cost of inventory paper did not increase much compared to last year.

Demand needs to be boosted, but the firepower of price increases will not be reduced. The price dilemma of cultural paper needs to be solved

The domestic epidemic broke out at many points, and the demand for publishing and printing paper was relatively sluggish; relevant units actively sought "self-help" to deal with short-term risk challenges. Under the influence of the two factors, the price increase letter that has been issued in a frenzy for several months has not landed as loudly as the paper mill expected.

"Before the first round of price increase letter was issued in March, the price of cultural paper did rush to 6300/ton. But after the price increase letter was issued, the market price of cultural paper did not rise as expected, even in April and May The month has experienced a significant decline." Lou Shengli told reporters that as of the end of June, the market price of double-adhesive paper was 5900-6000/ton, and the price of coated paper was 5700-5900/ton.

The previous wave of price increase letters has not been fully implemented, but under the market game, paper companies still use the form of price increase letters to guarantee profits. Judging from the first quarter financial report data of A-share cultural paper listed companies, there are indeed many paper mills whose net profit has fallen year-on-year. Leading companies in the production of cultural paper such as Bohui Paper, Huatai Co., Ltd., Sun Paper, etc., their net profit in the first quarter decreased by 77.72%, 41.4% and 39.08% respectively year-on-year.

On the one hand, demand needs to be boosted, and the letter of price increase from paper mills is difficult to land; In this cycle, the cultural paper market has fallen into a price dilemma that is contrary to market logic.

The relevant person in charge of the marketing department of a key domestic cultural paper company estimated that, due to the cost, the cultural paper market will start a new round of price increases in July.

"But July is a traditional off-season, and paper consumption is unlikely to grow significantly, and the actual situation that paper prices are hard to rise will remain." Zhuang Xiangqun analyzed.

The publishing and printing industry is also not optimistic about the implementation of the price increase letter, and believes that the price of cultural paper will likely remain stable. "From the perspective of the market trend, the future demand will not be strong." Xu Lisheng said that due to the impact of the epidemic, the uncertainties in the book market have increased, which will affect the demand for book paper with a high probability. With the rectification of the content and illustrations of related textbooks and supplements, uncertainty will also be brought about for the subsequent return of the market price of cultural paper to normal.

The fact that prices are affected by supply and demand is a normal reaction of the market, and now such frequent price increase letters and "upside-down" price quotations have caused the market "failure" of the entire publishing, printing and paper industry chain. As a result, the industry has heard endless calls for relevant government departments to strengthen the standardized management of the paper market. In addition to the short-term "self-rescue" buffer in the publishing and printing process, we are waiting for "other-help" to solve the long-term cultural paper price dilemma.