In 2007 raw material prices rose to ease the cost pressure

1. The price of raw materials continues to rise and is expected to rise at a high level

No matter whether imported wood pulp or imported waste paper prices will remain high during the year

Affected by the shortage of international waste paper supply, in September, the prices of imported waste paper and waste paper pulp rose sharply. It is expected that the price will remain high during the year, which will increase the production cost of waste paper and waste pulp as the main raw material company, and the gross profit margin will drop by 2-4. %.

Imported timber supply is tight, and imported pulp prices remain high

As the global forest area has decreased and the demand for emerging countries in Asia has increased, log supply has been tightened and prices have continued to rise. At the same time, Russia, the world’s largest exporter of logs, aims to reduce exports of low value-added logs and stimulate the development of high value-added wood processing industries in Russia. Since January 2007, it has substantially increased the export tariffs on logs, and the export tax rate will increase by 30 per year. %. By 2010, the ad valorem tax portion will increase by 2 times to 20%, and the specific tax portion will increase by 5 times to no less than 24 Euro per cubic meter. The increase in tariffs and the tight supply have contributed to the rapid rise in log prices, and it is expected that they will continue to rise in the future.

Judging from the trend of pulp prices, international pulp prices in the second half of 2007 are still very strong. In September, European wood pulp prices fell slightly after a record high in August, but they are still at a high level. It is estimated that after 2008, the price of imported wood pulp will increase. Perhaps with the gradual establishment of production lines in countries such as China and South America, the supply and demand of international wood pulp will be eased, and the price increase of imported wood pulp will slow down.

2. Increase in finished product prices, ease the pressure of rising raw materials

Although the price of raw materials continued to rise, the decline in the growth rate of fixed asset investment in the industry in 2006 indicates that the pressure on the release of industrial capacity in 2007 will slow down. The pressure on the release of production capacity in the industry as a whole has slowed down, competition has slowed down, and prices of major domestic paper products have been on the rise, and the cost has been passed on.

Cultural paper prices continue to go well. "Energy saving and emission reduction" measures have caused many small paper mills that have failed to meet environmental standards to gradually shut down. The reduction in the supply of cultural papers has led to the best price movement of cultural paper. Prices have increased by about RMB 300-500/ton since the beginning of the year. About 8%, it is expected that there will be room for price increase in the fourth quarter.

Newsprint prices bottomed out. The newsprint market was affected by the production of 800,000-ton production lines of Huatai and Chenming in the second half of 2006. In the first half of 2007, the performance was oversupply, and the price was always running low. Since April, prices have gradually increased and gradually Accepted by the market, and still rising steadily in August and September, the price of newsprint in some areas is close to 4,900 yuan/ton. However, due to the increase in domestic newsprint production and weak demand growth, there is limited room for newsprint price to rise in the future.

White cardboard prices are high. White cardboard and coated wrapping paper have continued to rise slowly since the second half of 2006. Since the beginning of the year, the increase has been about 5%, and the current price has stabilized at around 7,000 yuan/ton.

Coated paper prices have picked up. With the opening of markets in Europe and the Middle East, prices of coated paper, which had previously been declining due to anti-dumping attacks in the United States, have also picked up. In recent months, they have increased by about RMB 500/ton, a rate of 7%, and have recently risen even faster than newsprint. The extent of the paper jam has returned to 7300 yuan/ton or more. Due to the strong growth in demand, the prices of coated paper may continue to rise in the future.

The price of boxboard paper dropped steadily. In 07-08, the supply and demand of boxboard base paper will reach a basic balance. In the first half of 2007, due to the relationship between supply and demand, the price of linerboard was significantly higher than that of 2006. From the average price of 2700 in 2006, the average price rose to more than 3,000 yuan from 3,200 yuan, and it hovered around 3,000 yuan/ton for several consecutive months. The price was slightly lower in the second half of the year due to the impact of the new production capacity of Xiaolong and Libong.

Prices of other small paper species remained basically stable. Due to the upward trend in prices of major paper products this year, despite the gradual increase in raw material prices, the increase in product prices has eased the pressure caused by rising raw materials. At the same time, due to the continued prosperity of the paper industry, the potential for price increase of major paper products is still large, and the continuous improvement of the performance of key companies in the paper industry is worth looking forward to.