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The main factors for the declining price of kraft paper

Edit:Zhongshan Yida Paper Co., Ltd.UpDate:2020-06-18

The price of kraft paper has been declining recently, what will happen in the future? Since April, the price of kraft paper has been declining. The price of refined cattle above 80g has fallen by 100-200/ton, and the price of white kraft paper has been reduced by 200-400/ton. The inventory pressure of individual paper companies has continued to increase, and other small and medium-sized paper companies and traders have also been affected. Price reduction pressures continue to release price adjustment plans.

Data monitoring by Zhuo Chuang Information showed that as of May 31, the average monthly price of 80g domestic refined beef including tax was 7174.19/ton, down 0.59% month-on-month and 6.01% year-on-year. So what are the main factors affecting the recent decline in kraft paper prices?

First of all, from the perspective of cost, the spot market price of imported wood pulp has been under pressure recently. As pessimism dominates the market, pulp prices continue to be under pressure to sort out. Downstream paper companies are under increasing shipping pressure, raw material inventory consumption is slow, and the industry expects some grades to be lowered, the enthusiasm for stocking is not high, and market transactions are light.

Secondly, from the perspective of supply, certain paper companies have not planned to shut down for maintenance since the Spring Festival. Inventory is still at a high level. In addition, due to poor shipment conditions, the destocking situation is not as optimistic, and inventory pressure continues to increase, which still has a negative impact on the market. Have a certain influence. Individual small and medium-sized paper companies have been shutting down for maintenance due to the lack of recent orders to reduce inventory pressure. The start-up time has not yet been determined.

Secondly, from the perspective of demand, under the influence of global public health events, downstream terminal demand continues to be sluggish, transactions are relatively rigid, and the shipments of paper companies and traders in various regions are not good. Individual paper companies are accompanied by small amounts of inventory clearance. Letting profit. Due to the impact of global public health events, the export of kraft paper companies was restricted, and the downstream purchasing enthusiasm was not high, paper companies and distributors lowered their offers by about 100-200/ton.

In the latter part of the kraft paper price, from the perspective of mentality, as individual paper companies adjusted their offers in March and raised their prices by 100-200/ton, traders and downstream terminals had a heavier psychological resistance, and the actual order follow-up did not meet expectations. Therefore, after entering April, paper companies began to adjust prices one after another, lowering 100-300/ton, but it still did not stimulate the downstream. Whether it is paper companies, traders or downstream terminals, most of them hold a pessimistic attitude towards the market, so In the second half of May, most paper companies held steady offers, and the market was full of wait-and-see atmosphere.

To sum up, the kraft paper market continued to be weak in April and May, and the offer of individual paper companies was reduced by 100-200/ton. From April to May, the cash market price of 80g refined kraft paper including tax is mostly 5800-6600/ton; the market price of recycled kraft paper 70g including tax is 4700-5200/ton. The main factors affecting the kraft paper market are: first, the upstream spot market for imported wood pulp is under pressure; secondly, the overall shipments of paper companies are average, and the transactions are just in demand; later, downstream purchases are cautious, and the market is pessimistic.

According to the analysis of kraft paper prices, the kraft paper market is still in a weak operation in the short term. In terms of cost, Brazil’s shipments were stable in the first three weeks of May. Based on the proportion of shipments to China, the arrival of hardwood pulp will be stable in the future, while June is the industry's off-season. The demand is expected to be lower than expected, and pulp prices continue to be under pressure. Run-based. From the perspective of supply and demand, due to the recent increase in inventory pressures of large-scale paper companies, coupled with the predominantly cautious attitude of the downstream industry players, the situation of supply exceeding demand is more prominent. Therefore, Zhuo Chuang predicts that the kraft paper market will continue to be weak in June.

In the long run, due to the slow relaxation of foreign epidemic control measures, it will help the economy to recover and expect to heat up, which is conducive to the growth of finished paper sales. Coupled with the promulgation of the plastic limit order at the beginning of the year, it may further increase the downstream demand for kraft paper bags for raw paper. Because the raw materials of kraft paper have relatively little impact on the environment, kraft paper bags have high strength and high environmental protection performance, and become one of the most popular environmental packaging materials in the world. Therefore, kraft paper bags will also become one of the more suitable alternatives for people to choose. The promotion and application of alternative products in 2020 may promote the development of kraft paper. Therefore, Zhuo Chuang predicts that the kraft paper market may recover in the second half of the year, showing a narrow upward trend.