At the end of September, various paper mills issued price increase notices again, ranging from 100-200/ton, but the current market response is that price increases are not a problem, the problem is that supply exceeds demand! In 2019, the price increase of cultural paper has not stopped since the beginning of the year. In mid-to-late January, a price increase letter was issued for February, with the ex-factory price increased by 200/ton. After that, price increase letters were issued continuously from March to June, with price increases every month. 200/ton; in mid-to-late June, demand weakened, and a July price increase letter was issued to increase the price by 100/ton in order to stabilize paper prices. Price increases of 100/ton were announced in August and September. The ex-factory price of offset paper has increased by about 600-700/ton after the holiday.

Growing demand for paper publishing

At present, the supply of offset paper in the market is tight, and the inventories of paper mills, dealers, and terminal printing plants are low. September to October is the traditional peak season for cultural paper. As the bidding work for spring teaching materials in 2020 continues, printing plants With the support of orders from publishing houses in advance, the purchase volume of cultural paper will be increased, which will be beneficial to the offset paper market. 2019 marks the 70th anniversary of the founding of the People's Republic of China. Newly published books are expected to increase paper demand by hundreds of thousands of tons, boosting demand for offset paper. Although the number of new books decreased in 2018, according to data from the General Administration of Press and Publication, the number of books published increased and the printing volume also increased steadily.

paper supply

Recently, air pollution has occurred in northern China. The Ministry of Environment and Ecology has sent letters to the people's governments of Beijing, Tianjin, Hebei, Shanxi, Jiangsu, Anhui, Shandong, and Henan provinces, requesting all localities to promptly initiate emission reduction measures based on actual conditions to alleviate severely polluted weather. By then, printing plants and some paper mills around Beijing will begin to suspend production and reduce emissions, further reducing paper supply and being unable to meet current market demand. Due to environmental protection and other reasons, cultural paper mills reduced production and supply by about 100,000 tons in September. Market concentration has further increased, backward small and medium-sized production capacity has been gradually phased out, and new offset paper production capacity comes from the expansion of large paper mills. However, the release of new production capacity in the market in 2019 is slow. The import volume of uncoated paper has declined significantly in 2019. As of January to July, the cumulative import of uncoated paper was 230,000 tons, a year-on-year decrease of 160,000 tons (-41%). The reduction in imports has caused further tension in domestic supply. However, because foreign prices were higher than those in China in 2019, exports of uncoated paper increased, and the overabundance of export orders made the original domestic market supply even tighter. Exports of uncoated paper increased slightly from January to July 2019.

Inventory low

Paper mill inventories are low: Paper mills have been in tight supply, and paper mill inventories have gradually fallen from the highs at the end of 2018. In August, mainstream paper mill inventories have been reduced to about 10 days, and are still in short supply. Dealer inventory is low: After inventory digestion at the end of 2018, dealer inventory has declined rapidly, and paper mills have been in short supply, resulting in inventory replenishment that cannot be completed, and inventory has always been low. Entering 2019, dealer inventory continues to decline. The peak demand cycle in 2019 has arrived. The arrival of the bidding season and the demand for newly published books have squeezed the supply of social orders, and the supply of offset paper has always been insufficient. In recent years, the use of offset paper has begun to increase. In addition to traditional printing of teaching aids, industrial uses and promotional leaflets have gradually increased, and the market demand has exceeded expectations. The inventories of paper mills, channels and terminals are at a low level and cannot be replenished in large quantities. The release of new production capacity is slow and has not yet had an impact on the market; the market is in short supply and the price of offset paper will continue to rise.