Prospective Industry Research Institute
Industry cyclical fluctuations, industry sentiment index fell in 2018
The paper industry is a typical cyclical industry that is susceptible to macroeconomics and has long-term volatility. In terms of supply and demand in the industry, capacity building has a cycle of about 2 years. At the same time, demand is also affected by festivals, seasons, and academics, and regular fluctuations occur within one year. Therefore, the paper industry has typical cyclical attributes.
From the perspective of the big cycle, the paper industry has experienced a complete volatility cycle since 2007. After 2018, due to the impact of Sino-US trade frictions on raw material prices and the weak downstream demand, the price is lower, which has led to the profitability of industrial enterprises. The overall downturn in the industry has continued to decline.
From the perspective of the PPI trend of China's paper industry, it shows obvious cyclical volatility. In 2017, the prosperity of the paper industry continued to rise. In 2018, the PPI index of the paper and paper products industry declined sharply. As of November 30, 2018, the PPI index fell below 100, to 99.6, and fell back to 2016. The level of the month. Overall, the prosperity of China's paper industry declined in 2018.
Production and sales both fell, production and sales are basically balanced
From the perspective of the production of mechanical paper and paperboard, in 2010-2017, the overall output of China's paper products slowed down slowly, and the supply of the industry remained basically stable. However, the production of mechanical paper and paperboard in the first ten months of 2018 dropped sharply, with a production of only 907 million tons, a decrease of 8.44% compared with the same period of the previous year. It is expected that the national paper production in 2018 will have a significant downward trend from the previous year. .
At the same time, from the perspective of the production of mechanical paper and cardboard, the sales of Chinese mechanical paper in 2018 also showed a significant decline. From January to September 2018, sales of mechanical papers were 807 million tons, a decrease of 7.56% year-on-year.
From the perspective of production and sales, the overall supply and demand of the paper industry is basically balanced. In 2016-2018, the national mechanism paper production and sales rate remained basically above 96%, and the sales volume was basically kept in sync.
It is worth mentioning that, based on the higher production and sales rate of the industry, the progress of production capacity has played a decisive role in the supply expectations. On the one hand, under the pressure of supply-side reform since 2016, the industry's small production capacity has cleared, and the supply pattern has improved. At the same time, under the catalysis of environmental protection, raw material supply has tightened, and raw material prices have risen, and small enterprises have profitability. Damaged, further speeding up production capacity. On the other hand, leading enterprises have strong raw material acquisition capabilities based on capital and resource advantages, and capacity production continues to advance. Judging from the production plans of the leading enterprises in the next 2-3 years, the production capacity of the waste paperboard's boxboard/corrugated paper is more, while the cultural paper is relatively rigid due to the demand, and the production capacity is relatively stable. Overall, the growth of industry output in the next few years may depend mainly on leading companies.
Inventories increase, downstream demand is weak
As the downstream packaging industry in the paper industry is more dispersed, it is mainly possible to reflect demand conditions based on inventory conditions. From the inventory trend of the mechanism paper, the profitability of the mechanism paper in the early 2018 was significant, but from around March 2018, the inventory continued to grow. In addition, the cardboard and board industry and corporate inventories have also shown volatility growth since 2018, reflecting the relative lack of downstream demand. It can be seen that the downstream demand shows a clear weakness, that is to say, while the output of the paper industry declines in 2018, the industry is also facing huge de-stocking pressure.
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