The rise in paper costs

1.market conditions of previous years
     China’s waste paper consumption in 2017 is expected to be about 78 million tons, including about 27 million tons of imported waste paper. Imports have fallen again in 2016. In 2012-2017, the average annual growth rate of China’s waste paper consumption is about 5.0%. On July 18, 2017, the Ministry of Environmental Protection of the People’s Republic of China filed a document with the World Trade Organization (WTO) requesting an urgent adjustment of the list of imported solid wastes. It is planned to ban the import of 24 types of solid wastes, including waste plastics and vanadium from domestic sources, by the end of 2017. Highly polluted solid waste such as slag, unsorted waste paper, and waste textile raw materials.
     The import license for waste paper began to tighten in the second half of 2017. As of now, the waste paper permit will only be issued for 4,190,300 tons in 2018, and is expected to be not more than 20 million tons in the whole year. Compared to 2017, the Ministry of Environmental Protection has approved and approved the import of waste. The paper permit quota is 28,107,600 tons, and the supply gap is about 8 million tons.
     In 2018, the implementation of the customs inspection of imported waste paper and the approval process of the Ministry of Environmental Protection on import licenses will affect the market. In 2018, the miscellaneous rate of imported waste paper decreased from 1.5% in 2017 to 0.5%, and the domestic waste paper price continued to rise. The cost of waste paper purchased by paper mills increased.
     The China Pulp and Paper Association expects that the country’s national printing and writing output in 2017 will be approximately 17.9 million tons, of which wood pulp writing paper output will be approximately 8 million tons, the remaining 10 million tons will be mixed pulp and waste pulp products, and waste pulp products will be approximately 5 million tons. . According to the examination and approval of several batches of import licenses before 2018, the basic applications for permit quotas are all large factories. However, out of the 5 million tons produced by waste paper pulp, only some large paper mills can apply for import quotas. The supply of raw materials for the remaining 5 million tons of low-grade products is worrying, and this part of the demand will continue to be replaced by high-end products, which means that the demand for pulp and paper in the future will further increase.
2. 2018 Environmental Protection Policy in place
     Recently, many large-scale environmental protection initiatives have been launched across the country. More than a dozen problem paper companies have been exposed by the media. Waiting for them will be severe punishment such as suspension of production and fines.
     According to the latest notification from the Ministry of Environmental Protection, on January 19th, 22 inspection teams and 84 inspection teams inspected 1027 emergency warning and response points for heavy pollution weather in 22 cities including Shijiazhuang, Jinan and Zhengzhou. The enterprises with unreasonable procedures, procedures, and hidden dangers in production safety immediately issued a decision on suspension of production, and ordered unqualified companies to formulate plans to rectify and ensure compliance with environmental requirements before being able to boot.
3.Wood pulp prices continue to rise, paper mills are hard to reduce
     In 2017, the price of wood pulp rose by 68% to 98%. Currently, the price of spot wood pulp is stable and fine-tuned, but in the long run, the price of wood pulp will continue to rise. 2018 – No new pulp production capacity will be released in 2020. The pulp mill’s operating rate will be as high as 97%, and the supply of pulp will have unprecedented tension.
     At present, the factory ordered the pre-paid high-priced pulp that has already arrived one after another. The production cost of the paper mills has increased. The current price of coniferous pulp is US$900/ton, and that of broad-leaved pulp is US$760/ton. In February 2018, the outer disk of broad-leaved pulp continued to rise by US$20/ton. . Future cost pressures difficult to drop.
     In 2018, the South American pulp mill introduced an overhaul plan, which is expected to reduce the supply of about 157,000 tons in the first quarter. The Indonesian pulp mill also continued to reduce its supply in the first quarter, and the subsequent pulp price continued to rise.
4.Recent related trends
     Recently, on May 2, 2018, the General Administration of Customs of China issued an emergency document《Notice of the General Administration of Customs on Implementing Risk Early Warning and Supervision Measures on Imports of U.S. Waste Raw Materials》: starting from May 4, all waste raw materials from the United States will be fully implemented. Boxes are subject to inspection and quarantine, and all ports are strictly monitored. At the same time, the pre-shipment inspection of CCIC North America Branch was suspended for one month (May 4th to June 4th, 2018).
     In the short term, this will directly affect the amount of US-waste arriving in Hong Kong from May to July. According to customs statistics, the amount of waste paper imported in the period from May to July 2017 accounted for approximately 27.06% of the total amount of waste paper imported in the year, of which US and waste accounted for approximately 45.82%. All along, American Waste is China’s most important source of waste paper imports.
     In these circumstances led to the paper costs rise, want to know how we yobo through this storm it?


Post time: Jun-15-2018