Newsprint Encounters “paper Shortage” Xu Jingen Proposes Strengthening The Security Of Newsprint Supply 1

- May 27, 2018-

Newsprint encounters “paper shortage” Xu Jingen proposes strengthening the security of newsprint supply 1

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Since October 2016, due to multiple factors, the domestic newsprint market has undergone profound changes. The newsprint mills have been devastated, and news organizations have clamored. In 2017, the supply of newsprint appeared rare and some news newspapers even suffered a “paper shortage”. The security situation of newspaper publishing was very serious. This phenomenon must be highly regarded.

Paper security has reached its most dangerous period

Constrained by scarcity of domestic timber resources and huge pressure on environmental protection, in the past decade or so, China's newsprint production raw materials have been imported from abroad, mainly waste paper from the United States, referred to as the US waste. Over the past year or so, the United States and the United States have seen high prices and two shortages of goods.

The reason for the “high price” is that after the American Waste Standard Adjustment in 2017, the newsprint and linerboard materials use the same specification and waste, and the linerboard production cost is low, the selling price is high, and the demand is high. A large number of manufacturers shunted, and US-waste prices broke the historical high of US$200, which was higher by US$70/ton than the first half of 2016. At the same time, the Ministry of Transport has implemented the “Administrative Regulations on the Driving of Oversized Transport Vehicles” since September 21, 2016, which imposes strict restrictions on the overloading of cargo transport vehicles, resulting in a substantial increase in logistics costs, coupled with coal, chemical and other factors. The increase in cost has reached about 1,000 yuan, which has caused the prices and costs of newsprint to be seriously reversed.

The reason for “defective goods” is that in the new edition of “Imported Waste Management Catalogue” released in mid-August 2017, unsorted waste paper has been adjusted from import restrictions to import bans, and paper (recycled) paper and paperboard including waste specialties have been imported. Paper was included in the "banned list." Although this policy was formally implemented at the end of the year, due to the increase in environmental supervision in 2017, many companies have banned the import of related waste paper, leading to “waste paper shortage” on the market, which has also become a recent newsprint price acceleration. The important reason for the rise.

In recent years, as a result of rising raw material prices, tightening environmental protection policies, and restrictions on cargo transportation, domestic newsprint mills have suffered a loss in the industry, their production enthusiasm has been severely frustrated, production has been suspended, production has ceased, and even they have withdrawn from the newsprint market, resulting in a significant reduction in manufacturers. In 2012, there were nearly 20 large and small newsprint mills in China. At present, there are only 4 countries in the country (Shandong Huatai Paper, Shandong Chenlong Group, Guangzhou Paper Group, and Anhui Shanying Paper Company, among which Huatai and Chenlong account for more than 60% of the domestic newsprint market), among which Huatai, Guangpao and Shan Eagle Paper maintains normal production, and Shandong Chenlong Group is shut down due to environmental reasons. Affected by this, the production of newsprint has been greatly reduced, from 370 million tons in 2012 to a year-on-year decline, and it has dropped to 1.65 million tons last year, which is unable to meet the demand of China’s newspaper industry (the current total demand for newsprint is 1.7 million tons), and imported paper must be added. Reluctant to reach a balance between supply and demand. When a few newsprint mills had the lowest inventory in the last year, they could only maintain the country’s turnover volume of around 2 days.

Under this situation, newsprint companies hounded up prices, and newsprint prices rose sharply, rising from RMB 4,000 per ton in 2016 to the current maximum of RMB 6,000 per ton.

Under the impact of the new media, the operating conditions of the newspaper industry have been sluggish, and the sharp increase in prices of newsprint has further exacerbated the press industry's business. The personnel in the industry are worried. Taking the People's Daily as an example, an annual expenditure of 130,000 tons of newsprint will require an annual expenditure of over 200 million yuan, which will bring huge financial pressure to the newspapers. Taking into account the current situation of the newsprint market, the market situation that exceeds supply will continue, newsprint prices will further rise, and the pressure on newspapers will further increase.

Even if newsprint prices are all the way up, market supply is still often priceless. It is understood that since the second half of last year, the supply of printing spots at the central level newspapers has been poor. Xinhua News Agency has some printing points until November when the paper supply plan is only half completed. Guangming Ribao has seen negative inventory in several printing spots. In the face of severe circumstances, news organizations were forced to accept newsprint mills' price increases. People’s Daily has always had strict requirements on the stability, continuity, and quality of newsprint supply. At present, 49 Indian printing sites are distributed throughout the country. Some Indian printing spots have weak transportation and warehousing capabilities, and their anti-risk capability is poor. Indian printing spots are facing huge challenges. Due to the pressure of paper supply, some printing spots are in urgent condition. This is a problem that has never been encountered in the past. Many local newspapers even face the danger of "shortage of food."

Jiang Xinghua, director of the China Press Association’s commodity committee, summed up the current situation in three words: high (high price), low (low yield), and loss (both paper mills and paper-using units have losses). He warned that China’s newsprint security has reached the most dangerous period. Wu Guoqing, chairman of Xinhua News Agency Co., Ltd., is worried that newsprint price increases may become the last straw over the newspaper industry.

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