On the 6th, Skaha, CEO of Suzano SA, the world's largest pulp producer, said that pulp stocks have been gradually decreasing, and supply disruptions are likely to occur in the future, or lead to higher prices for essentials such as paper towels and toilet paper. Since the beginning of this year, there have been many voices about the price increase of paper products. How is the market performance? In April, a number of domestic paper products companies said that due to factors such as raw material prices and transportation costs, some paper types rose by 300 to 500 yuan per ton. The prices of printing paper and toilet paper commonly used in people's lives have also risen, ranging from 10% to 15%. Although paper products companies have set off a "price hike", from the financial reports disclosed by related companies, fluctuations in raw material prices have put pressure on the performance of related companies.

The world's largest pulp producer warns: stocks are running low

Suzano SA, headquartered in Brazil, is the world's largest pulp producer. Its CEO Skaha said in an interview with the media on the 6th that Russia is an important source of wood in Europe. Due to the escalation of the conflict between Russia and Ukraine, wood between Russia and Europe Trade has been completely blocked.

The production capacity of European pulp producers, especially in Scandinavia (Denmark, Norway, Sweden), will be curbed. "Pulp stocks have been gradually dwindling and heading towards supply disruptions. (Disruptions) are likely to happen," Skaha said.

Even before the outbreak of the Russian-Ukrainian conflict, the raw pulp market was already tight. The problem of insufficient container capacity is particularly acute in Brazil, where large quantities of sugar, soybeans and coffee are waiting to be exported, leading to continued increases in freight rates.

After the outbreak of the Russian-Ukrainian conflict, the price of food and energy soared, which not only increased the transportation cost of Brazilian pulp, but also squeezed the transportation capacity of pulp by food. The price of wrapping paper, diapers and toilet paper will rise, causing a new blow to consumers.

Demand for pulp in Latin America is exploding, but producers in the region have run out of room to take new orders and mills are already operating at full capacity. Skaha said the demand for pulp has long outstripped the company's capacity.

Skaha added that paper towels are a necessities of life, and even if the price rises, it will not affect the market demand for it.

Paper companies have issued price increase letters one after another

On May 2, Zhejiang Rongsheng Environmental Protection Paper Co., Ltd. sent a letter saying that due to the impact of the epidemic, the prices of raw and auxiliary materials remained high, and the company's operations were under heavy pressure. In order to ensure high-quality products and the timeliness of supply, Therefore, it has been decided to increase all products by 100 yuan/ton from May 8, and the five major paper machines will be shut down for 6-10 days in the near future.

Zhejiang Rongsheng Environmental Protection Paper Co., Ltd. is a listed paper company, mainly engaged in the production of recycled packaging paper products such as kraft linerboard, corrugated base paper, and corrugated cardboard. This downtime plan involves a total of five paper machines. The earliest from May 3, each paper machine has two downtime periods, which are the first ten days of this month and the middle and late ten days of the month.

A notification letter contains two contents of price increase + shutdown, although it is rare but not an exception. As early as April 27, Shanying International issued a "price increase + shutdown" notification letter: starting from May 8, all paper grades produced by each base will be increased by 100 yuan / ton; South China, Central China, Guangdong The five paper machines in the three bases will be shut down for 3-13 days each from May 1st to May 28th.

According to data from the National Bureau of Statistics, pulp prices rose by 15% in March compared with January.

The price of paper products has also risen, and the price increase has attracted much attention from the market. Affected by factors such as raw material costs and transportation costs, some paper types have risen by 300 to 500 yuan per ton. There were two concentrated price increases in January and March this year.

Cultural paper is a common paper type in everyone's life. Since March, paper companies including Shanying Paper, Yueyang Linzhi, Chenming Paper, etc. have successively reported price increases. Shanying Paper said that from March 25, cedar white kraft paper, spruce all-wood pulp stretchable paper, spruce kraft paper, etc. will be increased by 300 yuan / ton; from March 28, yew kraft linerboard, silver Fir kraft linerboard, high-strength corrugated base paper, etc. have been raised by 100 yuan/ton; from April 7, all paper types produced by each base have been raised again by 100 yuan/ton. Chenming Paper announced that the price of cultural paper series products will be increased by 300 yuan / ton.

In terms of household paper, related companies have also raised prices. In mid-March, Sun Paper announced that the shipping price of tissue base paper was increased by 300 yuan/ton, with a cumulative increase of 500 yuan/ton in the past month. Zhongshun Jierou also said before that most products have already implemented price increases, and the price increases vary according to regions, stores and specific products.

The price increase is not only limited to the domestic market. In Japan, Dawang Paper has raised all household facial tissues and toilet paper by more than 15% since March 22; Nippon Paper Crecia has more than 30 kinds of facial tissues, toilet paper and kitchen since April 1. The price of paper is increased by more than 10%.

A number of paper products companies said that since last year, the prices of raw materials such as wood pulp used in the production of paper products have risen, which has led to an increase in the production costs of enterprises. The increase is due to a combination of reasons that lead paper companies to raise prices.

And this isn't the first price hike this year. In January this year, a number of paper product companies have raised product prices. Among them, a subsidiary of Chenming Paper announced that the price of its full range of electrostatic copy paper products will be raised by 100 yuan/ton from January 28; Jinguang Paper Industry Co., Ltd. It was announced that since January 28, the prices of its full range of copy paper products will be increased, domestic products will be increased by 100 yuan / ton, and imported products will be increased by 200 yuan / ton; in addition, companies such as Sun Paper also announced price increases at that time.

Printing paper, toilet paper, and diapers have all gone up

The rise in the price of paper products is also related to the lives of ordinary people. The reporter visited a number of large supermarkets and learned that the price of toilet paper and other products that everyone usually uses has also risen, and the price of diapers from brands such as Kao has risen by about 10%. Citizen Ms. Li told reporters that household paper is a necessities of life and must be bought even if the price increases.

For many print shop owners, they have to bear higher operating costs. Mr. Chen, the owner of a chain printing shop, said that compared with the beginning of March, the price of many printing paper products increased by about 15%. Taking A4 paper as an example, the purchase price per box in early March was 120 yuan, and it rose to 135 yuan in mid-March. Converted to a price increase of 1.5 yuan per pack. He said that the price increase was mainly due to the increase in raw material prices, but they did not increase the price of printing by customers, and the cost was consumed by themselves.

"It was originally a small profit but quick turnover business, and the entire industry basically carried the cost pressure on its own." Mr. Cai, a graphic printing boss, said that single-sided printing is 0.15 yuan, and double-sided printing is 0.3 yuan. If it is not high, the price will not be raised.” Mr. Cai said that in March, the purchase cost of each box of printing paper increased by about 10%.

Costs rise sharply, paper companies' first-quarter performance declines

Recently, a number of paper product companies have released last year's financial reports. Affected by the increase in raw material prices, the performance of last year was under pressure and the gross profit margin fell.

On April 27, Bohui Paper released its first quarter performance report for 2022. In the first quarter, the operating income was 4.140 billion yuan, a year-on-year increase of 2.15%, and the net profit was 181 million yuan, a year-on-year decrease of 77.72%.

On April 30, Chenming Paper disclosed its first quarterly report for 2022. According to the financial report, Chenming Paper achieved operating income of 8.515 billion yuan during the reporting period, a year-on-year decrease of 16.57%, and its net profit fell by 90.34% year-on-year to 113 million yuan, which was about 1 billion yuan less than the same period last year.

According to the annual reports of Bohui and Chenming, the decline in performance was mainly affected by the pressure of rising raw material costs. Bohui's raw material costs in the first quarter were 35% higher than the same period last year. Bohui Paper stated on the investor interaction platform on May 5 that the main raw materials used in the production of the company's main product white cardboard are pulp and wood chips, which are mainly imported. Since last year, the cost of imported pulp and wood chips has risen year-on-year due to repeated global epidemics, prolonged supply chains, insufficient operation of overseas pulp mills and logistics bottlenecks. The company will continue to prepare the warehouse reasonably according to the production plan, and try to reduce the risks and impact of the fluctuation of raw material market prices on the company's production and operation.

The impact of rising costs on the performance of Chenming Paper has already appeared in the fourth quarter of last year. According to Chenming Paper's 2021 annual report, the company's single-quarter main income in the fourth quarter of last year was 7.258 billion yuan, a year-on-year decrease of 16.22%. Net profit was -117 million yuan, a year-on-year decrease of 118.38%; non-net profit deducted in a single quarter was -211 million yuan, a year-on-year decrease of 135.96%.

From the perspective of cost control, most papermaking enterprises feel the pressure on the cost side. The cost change of 15 enterprises is significantly higher than the change of operating income. Among them, the three listed companies with the highest increase are Songyang Resources, Wuzhou Paper, and Annie. shares.

In response to rising costs, major paper companies have also begun to actively respond. It is reported that more than a dozen pulp and paper mills, including Chenming Paper, Sun Paper, Huatai Paper, Bohui Paper, etc., collectively announced the May The price increase plan, this round of price increases mainly involves cultural paper, the increase is 200 yuan / ton.

"The cost side remains high, the profit level of the cultural paper industry has fallen negatively, and the profits of paper mills are under pressure. Therefore, paper mills have a strong willingness to raise prices and actively coordinate to raise prices." said Zhang Yan, an analyst at Zhuochuang Information.

But it remains to be seen how good the price increase will be for the industry. "Since the fourth quarter of last year, leading companies in the industry have issued multiple rounds of price increase letters in a row, but not every time they can be implemented, especially recently, there is not much terminal demand. Improve..." In a recent interview with the media, a staff member of a paper company said.