Price Boom Brings About Polarization: The Closure Of A Small Paper Mill And The Turning Of A Big Paper Mill

- May 07, 2018-

"Price boom" brings about polarization: the closure of a small paper mill and the turning of a big paper mill

Recently, the rise in the price of paper has resurfaced again, and the "Broken King" has begun to re-enter the rivers and lakes. According to the Henan Business Daily survey, the local waste paper box purchase price has risen from 2 cents per catty to more than one. In an interview, the downstream printers indicated that they would receive a price increase every month, and the owner of the carton factory sighed again and again and said: “Every day, we don’t want to say anything.” So, what are the reasons that led to the "high song" of paper prices? What is the impact of soaring paper prices on the entire industry chain?

Phenomenon: The purchase price of waste paper rose, and the waste paper box rose from 0.2 yuan to over 1 yuan per catty.

Whenever I saw Lao Yang, he always smiled. Anecdotal things are so happy? "The price of waste has gone up." On May 2, 2018, Lao Yang said while he was sorting out the waste paper boxes and old newspapers he just collected.

Yes, as you might think, Lao Yang is a waste collector, and he is known as the "broken king." Do not underestimate the collection of waste, Lao Yang rely on this, more than a dozen years ago from Xinyang home to Zhengzhou, for her daughter to read undergraduate and graduate students, and now also to his son bought a wedding in Zhengzhou to do the wedding.

However, before the May 1st of 2017, the price of waste products has been on the rise, allowing Lao Yang to stop for a long time. Just bought a used car did not dare to open, he said that business is not good, afraid of oil.

But recently, every time I saw Lao Yang, I could hear him sing a song while collecting waste. “Ten days ago, the price of waste paper began to rise. My business was good and I was in a good mood.” Lao Yang said that the original waste paper bins and waste newspapers were about 5 cents per catty, and only two catties per catty were low. Three cents, the public did not sell, they sent to the scrap purchasing station does not sell the price, but in late April, the waste paper bins rose to 8 cents per catty, old newspapers can rise to more than 1 per catty, The public sells more waste, and they also have money to make.

Lao Shen is a native of Heze, Shandong Province. He came to Zhengzhou last year. He is currently working in a residential area on Chengdong Road. Apart from his work, he often picks up some waste paper and cartons to sell. Lao Shen said that this wave of waste paper prices has been for a period of one or two days. If the cartons and newspapers are much more rampant, they will be transported to suburban waste collection stations and sell more than one catty per kilogram.

Carton Factory: Received a price increase notification every day, but I didn't want to say anything except sighing.

“I basically receive the manufacturer’s price increase notification every month.” This is what Mr. Chen has done in Zhengzhou, a printing paper wholesale business.

Mr. Chen has been in the paper industry for more than 20 years, because directly from the manufacturers to take delivery of goods, but also the earliest and most frequently received wholesalers notified of the price increases. In Mr. Chen’s opinion, for the paper industry, the increase in daily paper consumption by more than 2000 yuan per ton per year is not the highest, and the highest increase is in copy paper. "Before May 1, 2017, a box of A4 paper was sold for only 105 yuan, and it has now sold for more than 150 yuan." Mr. Chen said.

There are also manufacturers who are also under pressure to increase prices. Ms. Ning, the person in charge of Dingfeng Carton Packaging Plant, said that on April 30, she had just received a notification from the raw material supplier that a one-square-meter paper would have to rise by 1 centimeter. As a result, he received a new notice on these two days. One square meter of paper rose by another hair. "Every day, I don't want to say anything." Ms. Ning sighed.

Coincidentally. On May 2, Xinxiang City Henry Environmental Protection Technology Co., Ltd. issued a notice that, starting from the current date, it will increase RMB 100/ton on the basis of the current sales price. Shouguang Luli Paper Co., Ltd. of Shandong Province also stated that since May 1, 2018, the price of all products has been raised by RMB 100/t.

Traceability: What causes the paper price to "grow all the way"?

Mr. Chen believes that the first is the nationwide environmental supervision, the relevant departments of the paper-making enterprises failed to shut down, heavy penalties.

Second, Mr. Chen believes that raw material prices are also one of the reasons. The woods in the three northeastern provinces have long since ceased logging. Some trees are not allowed to cut without logging certificates. Some paper mills will import raw materials from abroad. Both of these reasons will increase costs and expenses.

In addition, Mr. Chen said that since March 1, 2018, the state's strict control of the "three wastes" (waste paper, scrap metal, waste plastics) is one of the reasons for the rise in paper prices. As the industry's more famous Nine Dragons Paper, its chairman Zhang Yin has been selected for the Hurun Rich List for many times. The company mainly started by processing and recycling American waste paper and Japanese waste paper.

Mr. Li, a staff member of Youai Road Small Commodity Market, believes that the increase in transportation costs caused by the relocation of paper mills, coupled with the rising labor costs, is also the reason why paper products “rose up”.

Impact: Small paper mills close down, large paper mills make money

How does the price of paper go up all the way, and what are the consequences? Quartz said that under strict environmental protection inspection, non-regulated small companies either exit the market or are swallowed up, and the paper products of large companies are increasingly recognized.

"From the supermarket promotion brand can be seen." Quartz said, a few years ago, when large and small enterprises coexist, papers with a price of less than RMB 10 can be seen everywhere. Now let's take a look again. Those small brands of household paper have become " "The yellow flowers will continue to bloom," and the brand-name paper that insists on quality is still a place in the supermarket.

In the industry shuffling, there are really big companies that make profits. Recently, Taizhou Yongsheng Packaging Co., Ltd. of Jiangsu Province released its 2017 performance report. The company's total operating revenue in 2017 was approximately RMB 204 million, an increase of 37.58% from approximately RMB 148 million in the same period of last year. The main reason for the company's profitability is: In 2017, the average unit price of Wing Shing's packaging board sales was 4.45 yuan, an increase of 56.37%; the unit price of the cartons was 4.93 yuan, an increase of 44.72%.

Also benefiting from the price increase is Zhongshan Zhongjian Environmental Packaging Co., Ltd. According to the company's 2017 annual report, the company achieved an operating income of 204 million yuan, an increase of 72.77% year-on-year, and a net profit of 176.5679 million yuan, a year-on-year increase of 122.10%. It is reported that this packaging plant has just been listed less than one year.

However, Mr. Chen believes that the environmental pollution of paper mills should not be underestimated. There is a town in Xinmi County. It was originally a large and small paper mill that produced paper money and money. Its raw materials were all kinds of waste papers that were acquired. In order to sell, manufacturers used bleaching and other operations on waste paper, causing serious environmental pollution. In recent years, it has been closed due to environmental protection.

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