Household paper in China Market : up then down in 2023, expected to stop falling in 2024 Q1
The price of household paper showed a rise and fall pattern in the fourth quarter of 2023, mainly driven by the changes in cost and demand. The average price was 6527 yuan/ton, up 4.07% month-on-month, but down 17.32% year-on-year. The price trend in each month was as follows:
- October: The price of household paper continued to rise, but at a slower rate than the previous months. The average price increased by 3.37% month-on-month. The main reason was the continuous rise of the upstream pulp price, which increased the cost pressure for the paper manufacturers and stimulated the downstream stocking behavior.
- November: The price of household paper started to decline, as the demand weakened and the inventory accumulated. The average price decreased by 0.53% month-on-month. The cost remained high, but the demand was gradually fading, leading to a surplus of supply over demand. The paper manufacturers began to reduce production or shut down some lines, but this was not enough to ease the market situation.
- December: The price of household paper kept falling, as the demand remained flat and the supply exceeded demand. The average price dropped by 2.32% month-on-month, reaching the lowest level of the year. The paper manufacturers increased their production cuts or shutdowns, but this did not support the price stabilization, as the market was still oversupplied.
Upward cost is the main reason to support the increase in the price of household paper in the previous period
Wood pulp household paper in the household paper market occupies a dominant position, the rest of the paper prices have to follow the practice of its adjustment, so here to wood pulp household paper, for example, in October, the price of wood pulp household paper rose less than the rate of increase in costs, resulting in an increase in the cost of wood pulp household paper enterprises cost pressure to dominate the average price of wood pulp household paper in October continued to move upward, which led to the price of bamboo pulp household paper, sugarcane pulp household paper together with the upward.
Imported wood pulp spot market prices in October rose and then fell, the overall average price rose, and at a relatively high level. Because of the imported coniferous pulp, hardwood pulp prices, and the average price increase in October to expand, resulting in the cost of wood pulp household paper increased by 620 yuan / ton, up 9.25% over September, an increase of 4.02 percentage points. Therefore, rising costs, and the increase in the case of expansion, dominated the average price of wood pulp household paper in October, the average price rose 3.37% per month, significantly narrower than the cost increase, and the demand side of the demand side has weakened, the current contradiction between supply and demand has been gradually revealed.
Supply and demand side dominated the middle to late paper prices down run
Supply and demand contradictions have gradually emerged in October, intensified in November, supply and demand contradictions in December to improve limited, so the dominant household paper prices from up to down. And upstream pulp prices due to soft terminal demand, the phenomenon of decline, upstream and downstream linkage, living with the paper in the middle and late fourth quarter showed a sustained downward trend, and gradually approaching the lowest value of the year.
The contradiction between supply and demand for household paper intensified in November. Part of the paper enterprise orders continue to decline, inventory continues to rise, has gradually begun to overhaul or production cuts, production decline in the vicinity of 8.23%, but still not able to improve the market supply and demand contradiction, the paper enterprise inventory increased by 15.36%, the contradiction between supply and demand intensified. This led to a downward trend in household paper prices, a cumulative decline of 1.89% during the month.
December supply and demand contradictions continue, forcing large paper enterprises to increase downtime maintenance, Hebei region in the second half of the shutdown, Sichuan region at the end of the month began to shut down, and so on. The supply side continued to downward trend, gradually improve the market supply and demand contradictions, household paper production slumped 10.18%, the paper enterprise inventory appeared 1.26% decline, supply and demand contradictions began to improve. However, the paper enterprise inventory is 11.13% higher than the average level of the year, compared with October is still 13.91% higher, the contradiction between supply and demand still exists, resulting in the price of household paper is still showing a downward trend, the cumulative downward movement of 1.93% during the month.
Household paper prices in the fourth quarter of the first rise and then decline
- Supply side: January paper enterprises due to December downtime maintenance recovery, preparation for the Spring Festival stock preparation, consumption of pulp inventory and other reasons under the influence of production than in December or a rebound; February during the Spring Festival holidays, the paper mill maintenance increased, production or narrowed again; and March in the preparation of a small season, the production of paper enterprises has increased. The overall market supply follows the seasonal pattern of change, showing an initial increase and then decrease after the rebound trend.
- Demand: January end market inventory demand, but the terminal finished product orders to improve the situation, the downstream processing plant inventory intention is still insufficient, only to digest the premise of a moderate amount of orders based on the premise. February on the eve of the centralized logistics shutdown or improve, but the overall February due to the impact of the Chinese New Year holiday, mainly digesting inventory of raw paper, the market demand for raw paper presents a seasonal off-season. march demand for stockpiling increased, the downstream moderate March stocking demand increased, the downstream moderate purchase, market trading active or pick up.
- Cost: the current international pulp prices are relatively stable, spot pulp prices are limited cost changes. Coupled with international logistics, financial characteristics, upstream and downstream linkage and other factors, pulp prices spot prices or first suppressed and then rise, but the overall fluctuations are limited, the impact on the living paper prices to reduce.
Comprehensive above, the cost side of the impact is reduced, the supply and demand side according to seasonal fluctuations, living with the paper prices or stabilized before the Spring Festival, after the Spring Festival upstream and downstream linkage, the price or a slight rebound.
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