Plunging 15% In The First Half Of The Year: The Newsprint Market Meets The Toughest Time

- Jun 01, 2018-

Plunging 15% in the First Half of the Year: The Newsprint Market Meets    the Toughest Time


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 According to the survey data recently released by the China Press Association, the total paper consumption of newsprint in the first half of 2016 was reduced by 82,000 tons from the first half of 2015, a year-on-year decrease of 14.3%. This is another news that the newsprint market has experienced declining trend after falling for several consecutive years.


The whole market is "more difficult"


“The current newsprint market is in the most difficult time.” In an interview with a reporter from China Press, Publication, Radio, Telegraph, Li Guoshun, deputy general manager of Shandong Huatai Paper Co., Ltd., expressed his feelings.


The "difficulty" of Li Guoshun's statement can be explained by several data: In a short span of 4 years, the total output of the newsprint mill has been reduced from 3.8 million tons to the estimated 2.1 million tons this year; the price of newsprint has been 5,800 yuan since the highest period in 2008. It fell to about 4,100 yuan today and it fell for eight consecutive years.


On the one hand, terminal prices have fallen slightly, while costs have continued to rise. In the first half of this year, the US Waste (paper recovered from the United States and Canada) has risen from US$135 to US$180 at the beginning of the year. Li Guoshun has roughly calculated that, plus pressure from environmental protection, security, and funds, the company will lose 400 yuan per ton of newsprint. about;


On the other hand, the pressure of funds used by enterprises for production has gradually increased, and the phenomenon of arrears in the use of paper units has increased, making the payment cycle for newsprint longer, the cash flow of paper mills difficult, and pressure increasing.


Chain reaction "unpredictable results"


Hu Huaifu, secretary-general of the China Press Association, pointed out that the newsprint market was sluggish and demand was declining. As a result, many domestic newsprint manufacturers adopted measures to reduce production and change production, and some even withdrew from the newsprint market.


Li Guoshun mentioned that Shandong Huatai Paper Co., Ltd. changed the original six machines for producing newsprint, three of which had already been changed to produce cultural paper and packaging paper. It is expected that only two newsprint production lines will be maintained in the future.


According to incomplete statistics, in recent years, one to two newsprint manufacturers have withdrawn from the newsprint market each year. The original large and small domestic and foreign paper industries have only a few companies now.


"The deteriorating operating conditions and the constantly squeezing living space will inevitably lead to the accelerated withdrawal of some paper-based companies or individual paper companies that are still struggling to support them." According to Han Chunhui, deputy general manager of Guangzhou Papermaking Co., Ltd., this accelerated exit It may lead to an acceleration of the balance between supply and demand, and from then on, the market will stabilize and the price of paper will return to a reasonable level. On the other hand, it is also possible that there will be "excessive delays" in the exit phenomenon.


Han Chunhui’s worry is not impossible. According to Li Guoshun’s introduction, by the end of June this year, the inventory of several major newsprint factories had dropped from 230,000 tons last year to 130,000 tons, with only 20 days of turnover. Moreover, many manufacturers are still arranging further restrictions on production. "This phenomenon may affect the safety of paper, and needs further attention." Li Guoshun said.


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