Packaging / Advertising & Office

Huacheng Import and Export Data Observation reported that energy prices and the resulting surge in the prices of other raw materials will lead to a continuous increase in the production costs of pulp and paper manufacturers in Europe. And my country's enterprises with large-scale pulp production capacity will benefit.

Under the impact of the energy crisis, large-scale reductions in paper production in Europe

According to the German Paper Association last Tuesday, under the impact of the natural gas crisis, the entire paper industry is facing huge cost pressures, and the toilet paper manufacturers are in a particularly difficult situation, and the drying link in the production process is difficult to carry out.

Germany is Europe's largest paper producer, with an annual output of 23.1 million tons last year, accounting for a quarter of Europe's total. However, Germany's dependence on Russian gas is quite serious, and it has become the hardest hit area of the recent gas crisis.

According to Huacheng Import and Export Data Observation report, in August, every packaging factory in Germany announced to reduce the purchase of recycled paper by 20,000 to 50,000 tons, nearly 15% less than normal. In addition, some paper mills have advanced or extended scheduled inspections and downtime.

The production cut is not just happening in Germany, Europe's leading corrugated packaging giant Smurfit Kappa also announced a production cut of about 30,000 to 50,000 tons in August. In recent years, more than a dozen paper manufacturers in Europe have announced their withdrawal or relocation, and 6 million tons of paper production capacity has disappeared.

The good news is that European paper exports do not account for a high proportion of global consumption, and European paper is basically self-produced and sold, and the reduction of local production capacity will not pose a big blow to consumption in other regions. Even the malaise of the European paper industry may be a rare opportunity for other countries.

China's paper exports rebound

According to Huacheng Import and Export Data Observation Report, in the global market of paper and cardboard, Asia has always been a major producer and seller, with production accounting for 47.3% and consumption accounting for 49.2%. And China is the largest country in the global paper industry.

However, according to the forecast of Bohai Securities, under the dual pressure of rising raw material prices and weak demand, the trough period of the domestic paper industry will continue.

There is a saying that flowers bloom outside the wall. According to media reports, affected by the closure and conversion of European cultural paper factories, the UPM strike and the conflict between Russia and Ukraine, Europe has shown a situation of insufficient paper supply. Foreign countries have recently made inquiries to Chinese companies. Soaring, and now the export orders of paper enterprises with export product standard certification in my country have been saturated. If the European paper industry continues to suspend production on a large scale in the future, China's paper export market is expected to become more popular.

According to Huacheng Import and Export Data Observation Report, from January to July 2022, the cumulative export volume of my country's machine-made paper and cardboard was 3.85 million tons, an increase of 85.13% compared with 2.0796 million tons in the same period last year. Chenming Paper, a leading company in the industry, disclosed in its semi-annual report that in the first half of this year, it achieved revenue of 16.676 billion yuan, of which overseas sales revenue increased by more than 120% year-on-year, which was particularly eye-catching.

However, China's paper production mainly meets domestic demand, and the overall export volume is not large. In 2021, China's export volume of paper and cardboard will be 5.47 million tons, a decrease of 400,000 tons compared with 2020, accounting for 4.5% of China's total paper output in that year. Among them, white cardboard, specialty paper, coated printing paper and tissue paper are ranked in export volume. Top four.

According to the Huacheng Import and Export Data Observation Report, industry insiders said that geopolitical conflicts have affected the supply of timber and energy. The timber exports of Russia, Belarus and Ukraine accounted for more than 25% of the global timber trade last year. In addition, energy prices and the resulting surge in other raw material prices will continue to increase production costs for pulp and paper manufacturers in other parts of the world. Domestic enterprises with large-scale pulp production capacity will also continue to benefit.