The hottest paper industry is unpredictable. Nine

The paper industry is unpredictable. Nine Dragons Paper announced that it would comprehensively reduce prices

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core tip: since 2019, nine dragons, Shanying and Liwen have been insisting on raising prices. Unexpectedly, the situation suddenly changed. As the leader of the world packaging paper industry, Nine Dragons Paper, a paper giant whose production capacity accounts for more than a quarter of China's packaging paper production capacity, suddenly announced that it would cut prices across the board, with an overall reduction of 100-200 yuan/ton. Does this mean that a new round of market adjustment will begin

[China Packaging News] since 2019, nine dragons, Shanying and Liwen have been persisting in raising prices. Unexpectedly, the situation suddenly changed. As the leader of the world packaging paper industry, Nine Dragons Paper, a paper giant whose production capacity accounts for more than a quarter of China's packaging paper production capacity, suddenly announced that it would cut prices across the board, with an overall reduction of 100-200 yuan/ton. Does this mean that a new round of market adjustment to build private brands will begin

recently, Nine Dragons Paper broke the news that it will reduce the price of paper by 100~200, which will be implemented on March 12. The specific adjustments are as follows: Jiulong and Hailong cattle cards are given a discount of 150, Dilong cattle cards and recycled cattle cards are given a discount of 100, core paper 50/70g is given a discount of 200, other core paper is given a discount of 100, coated cattle cards are given a discount of 200, and the prices of other cattle cards remain the same

when Nine Dragons Paper held its 2019 interim performance conference in Hong Kong not long ago, Zhang Yin said that due to the impact of Sino US trade and environmental protection policies in the first half of the year, the demand and price of the paper industry were under pressure. In addition to the increase in total sales, gross profit and gross profit margin fell, and net profit fell by 48%. Therefore, according to the trend of finished paper and raw materials, finished paper should have an increase of 200 yuan from now on. The news of a price increase of 200 yuan has just been released for more than ten days, but it suddenly announced a price reduction of 200 yuan. The choice of this adjustment is also quite unexpected

but considering the current domestic and international market conditions, this move of Nine Dragons is unexpected but reasonable

after the beginning of this year, the downstream demand is not optimistic. In addition, the trade war led to a large number of overdrafts in export orders in the first quarter, many manufacturers have no orders to do, and the major paper mills are facing great inventory pressure, and even bursting positions. In 2018, due to the impact of the domestic and foreign market environment, many paper mills have been in a state of shutdown, hoping to ensure profits and maintain the normal operation of the enterprise through shutdown. Although they have been shutdown all the time, the fact is that the reduction of production capacity due to shutdown is far from catching up with the contraction of demand. Long-term shutdown will cause them greater losses and greater capital losses, It may lead to the shortage of capital chain and affect the overall operation of the company. Under this situation, major paper-making enterprises are in a dilemma. Therefore, Nine Dragons Paper, for example, is forced to take the lead in making business strategic adjustments, trying to turn the tide and change the operational dilemma of enterprises through strategic adjustments

in fact, nine dragons does not have room for price reduction. Recently, the FOB price of imported corrugated cardboard waste from the United States is less than 400 yuan, and the imported daily waste has also plummeted. Nine dragons and other giants with a large number of foreign waste approvals have very considerable profit margins. Here, the current price of imported paper is far lower than the domestic price. During this period, many paper mills, including nine dragons and Levin, have transferred paper from overseas to Guangdong to sell, forcing nine dragons to reduce the competition for imported base paper

a comprehensive analysis of the sudden price reduction behavior of Nine Dragons Paper shows that their price reduction adjustment is indeed inevitable. The internal and external forces of the market force them to adjust. Moreover, this adjustment seems to expose the strategic adjustment of Nine Dragons' business strategy in the market. In short, nine dragons earn one point, strive to ensure the return of funds, and even implement the strategy of zero inventory. If it is done, it will be sold, and if it cannot be sold, it will be reduced. No matter what the price, it must be sold

but according to the current market, even if the paper mills cut prices, it is unlikely to cause a large number of downstream industries to eat. What will the subsequent paper price trend be? Still not very clear

we can review the situation of paper price in 2018:

in the first half of 2018, the average price of box board paper showed a trend of rising first and then falling. The highest point was 5660 yuan per ton in the second week of May, and the lowest point was 4750 yuan per ton in the second week of January. The average price of box board paper increased by 850 yuan per ton, and the price of box board paper fell by 100~400 yuan per ton in January. However, with the continuous shutdown and maintenance during the Spring Festival, the supply fell, In addition, the low price showed signs of rising due to the preparation of goods in the downstream before the festival. From the return of the festival to the first ten days of March, driven by the rising price of raw materials used yellow paperboard and the extra tight supply and demand, the market price rose one after another, with a total increase of 400-500 yuan per ton. However, from the middle and late March to the end of April, it was easy for the extruder to be used as a critical processing device, and the market trading of equipment cooled down. In early May, the General Administration of Customs strengthened the supervision of American waste and accelerated the rise of carton paperboard prices, In the middle and early ten days, the national average price rose by 850 yuan per ton, or 19.68%, but due to the low season of downstream demand, the downward pressure on paper prices increased. Since June, the corrugated paper market has entered a volatile downward channel due to frequent fluctuations in raw material prices and shrinking export orders

in the second half of 2018, the corrugated box board market as a whole showed a downward trend. From November to December, there was a peak demand season, and the paper price rose slightly by 50-150 yuan per ton. In the second half of the year, the average price of box board in China reached the highest point, which was 5640 yuan per ton in the first week of June, and the lowest point was 4393 yuan per ton in November and the second week. In the second half of the year, the main reasons for the decline of paper prices are the weakening of demand in the second half of the year, the reduction of China's export orders and other factors

according to the analysis, the paper price will fluctuate greatly in the future

referring to the paper price market in 2018, it is difficult to change the situation that the paper price will continue to be volatile in 2019. The situation of weak domestic demand and reduced export orders has not been fundamentally changed after all

under the trend of economic globalization, price changes will also be affected by national monetary policy, international exchange rate and other aspects. As far as the current situation is concerned, it is still a prudent and loose monetary policy, and there is great pressure on price inflation. Coupled with the instability of the RMB exchange rate, it is generally believed that the valuation is too high, which also brings rising expectations to the market

the overall loose monetary policy may stimulate the rise in prices, and the paper price will rise accordingly. Once the exchange rate of RMB against the US dollar is corrected, it will directly lead to the rise of paper price

in a word, the subsequent unstable factors of paper price far exceed the changes in the scope of supply and demand, and the possibility of large fluctuations or even sharp rises in paper price is still not ruled out during the year

the market is like electricity, unpredictable, and people in the paper industry cherish it

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