1、 Production completion status from January to September 2023

According to the statistics from the National Bureau of Statistics, as of the end of September 2023, there were 7628 enterprises in the pulp and paper industry, an increase of 308 compared to the same period last year. Among them, there are 58 pulp manufacturing companies, 2559 paper manufacturing companies, and 5011 paper product manufacturing companies.

The production situation reported by the National Bureau of Statistics from January to September this year:

Paper and cardboard production reached 104.43 million tons, an increase of 2.88 million tons or 2.8% compared to the same period last year;

11.81 million tons of pulp, an increase of 40000 tons or 0.3% compared to the same period last year;

Paper products reached 53.71 million tons, a decrease of 1.18 million tons or 2.2% compared to the same period last year; Among them, the production of cardboard boxes was 21.29 million tons, a decrease of 4.38 million tons or 17% compared to the same period last year.

2、 Completion status of major economic indicators

According to statistics from the National Bureau of Statistics, the completion status of the main economic indicators of pulp, paper, and paper products enterprises above designated size from January to September 2023 is as follows:

(1) Main business income

The entire industry completed 1006.76 billion yuan, a decrease of 3.6% compared to the same period last year. Among them:

The pulp manufacturing industry completed 14.04 billion yuan, a decrease of 3.4% compared to the same period last year;

The paper industry completed 580.48 billion yuan, a decrease of 5.0% compared to the same period last year;

The paper product manufacturing industry completed 412.25 billion yuan, a decrease of 1.6% compared to the same period last year.

(2) Total profit

The entire industry completed 22.07 billion yuan, a decrease of 25.3% compared to the same period last year. Among them:

The pulp manufacturing industry completed 160 million yuan, a decrease of 88.9% compared to the same period last year;

The paper industry completed 7.63 billion yuan, a decrease of 43.3% compared to the same period last year;

The paper product manufacturing industry completed 14.29 billion yuan, a decrease of 2.8% compared to the same period last year.

(3) Finished product inventory

The total industry value was 66.35 billion yuan, a decrease of 7.6% compared to the same period last year. Among them:

The pulp manufacturing industry reached 720 million yuan, an increase of 23.8% compared to the same period last year;

The paper industry reached 41.55 billion yuan, a decrease of 12.1% compared to the same period last year;

The paper product manufacturing industry reached 24.08 billion yuan, an increase of 0.6% compared to the same period last year.

Based on the analysis of statistical reports from this year and last year, the industry experienced a decline in revenue and profits in the first nine months of this year, and the overall economic performance indicators were weaker than last year.

3、 Import of commodity pulp and waste paper and production of primary pulp

1. Analysis of Import Situation of Commercial Pulp

From January to September 2023, China imported 26.83 million tons of various commodity pulp, an increase of 4.78 million tons compared to the same period last year, a year-on-year increase of 21.7%. Among them, 6.88 million tons of bleached coniferous pulp increased by 1.5 million tons compared to the same period last year; Bleached broadleaf pulp reached 11.82 million tons, an increase of 2.06 million tons compared to the same period last year; 950000 tons of natural wood pulp, a decrease of 260000 tons compared to the same period last year; Dissolved slurry reached 2.94 million tons, an increase of 340000 tons compared to the same period last year; 3.19 million tons of waste pulp, an increase of 1.17 million tons compared to the same period last year. Exporting 173000 tons of pulp, a year-on-year decrease of 33000 tons.

From the import data of commercial pulp in the past 9 months, except for natural wood pulp, all other types of commercial pulp have increased.

Based on the import volume and supply situation of commercial pulp market in the first nine months of this year, combined with the production situation of domestic pulp, paper, and paperboard, we estimate that the total import volume of commercial pulp for this year will be about 35 million tons (including dissolved pulp, fluff pulp of about 4.7 million tons, and waste pulp of 4.4 million tons), an increase of about 18%; The estimated export volume is 200000 tons, a decrease from the previous year.

2. Import of waste paper and pulp and domestic production of waste pulp

Last year, China produced 59.14 million tons of waste pulp, with a total usage of approximately 66.42 million tons of waste paper. Among them, China recycled approximately 65.85 million tons of various types of waste paper and imported 570000 tons of waste paper. In addition, 3.36 million tons of waste pulp were directly imported, including approximately 480000 tons of other paper and paperboard actually used for pulp, with a total usage of 62.98 million tons.

From January to September this year, the cumulative import of various types of waste paper was only 420000 tons, which is basically the same as the same period last year. The cumulative import of waste pulp from January to September was 3.19 million tons, a year-on-year increase of 58%. In addition, about 300000 tons of other paper and paperboard products were used as waste pulp.

Due to the implementation of a ban on the import of waste paper, only the amount of waste paper collected to assist in the processing of waste paper in Hong Kong and Macao has been retained, resulting in a basic import volume of around 500000 tons of waste paper in the past two years.

Based on the current understanding, it is expected that approximately 65 million tons of waste paper will be recycled domestically this year, a slight decrease from the previous year; The import of waste paper is about 500000 tons, and the total production of waste pulp is about 58 million tons, which is expected to decrease by about 1.1 million tons compared to the previous year. Directly importing about 4.4 million tons of waste pulp, an increase of about 30%. In addition, importing nearly 400000 tons of other paper and paperboard actually used as pulp raw materials, it is expected that the annual consumption of waste pulp will be about 62.8 million tons, which is basically the same as the previous year.

3. Production situation of primary pulp

Based on the import situation of commodity pulp and waste paper, combined with the production and consumption of domestic paper and paperboard, as well as the analysis of domestic waste paper recycling, we estimate that the annual production of various types of raw pulp in China will be about 27.5 million tons, an increase of about 2.9% compared to last year. With the addition of import and export volume, we estimate that the annual apparent consumption of raw pulp for papermaking will be about 53.2 million tons, an increase of about 9.4% year-on-year.

4、 Analysis and prediction of production and consumption of main varieties of paper and paperboard

1. Newsprint

According to statistics, the national production of newsprint in 2022 was 900000 tons, with 57 tons imported and 10000 tons exported. The consumption was 1.35 million tons, a decrease of 15.6%.

The domestic production of newsprint from January to September 2023 was 596000 tons, a decrease of 104000 tons or 16% compared to the same period last year; Imported 392000 tons, a year-on-year increase of 4.3%; The export volume was only 18000 tons, a year-on-year increase of 2.5 times.

At present, there are three main domestic manufacturers of newsprint. Affected by factors such as demand, cost of raw materials such as waste paper, and imports, the production and sales of domestic newsprint continue to decline this year.

It is expected that the total production of newsprint in 2023 will not exceed 800000 tons, a decrease of more than 10%. The import volume is about 500000 tons, the export volume is about 20000 tons, and the total consumption for the year is expected to be around 1.3 million tons, a year-on-year decrease of 3.7%.

2. Printing and writing paper

In 2022, the production volume of uncoated writing and printing paper was 17.35 million tons, a year-on-year increase of 0.9%. Imports were 450000 tons, a decrease of 35%, exports were 1.02 million tons, an increase of 70%, and consumption was 16.78 million tons, a year-on-year decrease of 6.4%.

Based on the data we have and the changes in the import and export of such products and raw materials, the overall production and market demand of this type of product this year are better than last year. The expected annual production of uncoated printing and writing paper is about 17.75 million tons, an increase of about 2.3% compared to the previous year; The export is about 1.35 million tons, the import is about 380000 tons, and the annual consumption is about 16.78 million tons, which is basically the same as the previous year.

3. Copperplate paper

In 2022, the domestic production of copperplate paper was 6.2 million tons, an increase of 2.5%, imports were 200000 tons, a decrease of 33%, exports were 1.49 million tons, an increase of 166%, and consumption was 4.91 million tons, a decrease of 15.2%.

After being restricted by industrial policies, copperplate paper is currently a relatively stable variety in production and sales. Due to the improvement of domestic product quality and changes in the global market pattern, the demand for copperplate paper in the market has decreased in imports and increased in exports in the past two years.

According to our current investigation and analysis, it is expected that the domestic production of copperplate paper will be about 6.3 million tons in 2023, a year-on-year increase of 1.6%; The export volume is about 700000 tons, a year-on-year decrease of about 53%; The import volume is about 160000 tons, a year-on-year decrease of about 20%; The annual consumption was about 5.76 million tons, an increase of about 17% compared to the previous year.

4. Household paper

With the needs of the people for a better life and the improvement of living standards, the production and variety of paper products for daily use have been continuously increasing in recent years. However, due to the rapid growth of production capacity, fierce market competition, and high fluctuations in the prices of raw and auxiliary materials such as commercial pulp, it is difficult to achieve complete extension of production costs, which has led to a decrease in the profitability of most domestic paper production enterprises and increased difficulties.

According to statistics, the domestic production of household paper in 2022 was 11.35 million tons, an increase of 2.7%; Imported 30000 tons, exported 790000 tons, and consumed 10.59 million tons, an increase of 1.2%.

Based on our understanding of the domestic production and market of household paper, as well as the consumption of commercial pulp, the total production of household paper in China is expected to be around 12 million tons this year. The import volume is expected to increase slightly compared to the previous year, but the export volume is expected to increase by more than 40%, reaching over 1 million tons. The domestic apparent consumption is expected to reach 11 million tons, an increase of nearly 4%.

5. Whiteboard paper

With the need for high-quality development of the industry and changes in the structure of domestic papermaking raw materials, there have been structural changes in the production and market demand of whiteboard paper in the past two years. Among the segmented varieties of whiteboard paper, the production of gray background whiteboard paper has significantly decreased, while the production and production capacity of white cardboard paper are rapidly increasing. Although the market's expectation for the total demand for whiteboard paper has weakened, the overall consumption performance in the market is still relatively stable.

According to statistics, the annual production of white cardboard in China last year was 15.9 million tons, a year-on-year decrease of 4.3%; Exports reached 2.55 million tons, a year-on-year increase of 63%, while imports reached 440000 tons, a year-on-year decrease of 24%; The annual consumption was 13.79 million tons, a year-on-year decrease of 3.4%.

According to our current survey and analysis, it is estimated that the annual production of this year will be about 16.3 million tons, an increase of about 2.5%; The export volume is about 2.35 million tons, a decrease of about 8% compared to the previous year; The import volume is about 450000 tons, a slight increase from the previous year; The expected annual consumption is about 14.4 million tons, an increase of about 4.4%.

6. Box board paper and corrugated base paper

Box board paper and corrugated base paper are used as raw materials for various packaging cartons and boxes, and are used in conjunction with many products. China is also a major manufacturing country in many industries, and paper packaging materials are indispensable products. Box board paper and corrugated base paper are the products with the highest market demand, accounting for 50% of the total consumption of paper and cardboard.

Due to the adjustment of the import policy for recycled waste paper, there is a shortage of raw materials for the production of such products in China. It is necessary to increase the domestic waste paper recycling cycle rate to increase the total amount of raw materials. However, as the number of cycles increases, the quality of raw materials decreases. (Although the production process supplements some original pulp or commercial waste pulp, the amount of fiber fillers and starch used has to be increased due to cost constraints.) The quality of some finished products has been affected, especially the high-strength cardboard and corrugated base paper required for producing export products and heavy goods, which have been greatly affected, and the import volume of such products has remained high in recent years.

According to statistics, the domestic production of cardboard boxes reached 28.1 million tons last year, a year-on-year increase of 0.2%; The import volume reached 3.6 million tons, the export volume was only 110000 tons, and the annual consumption was 31.59 million tons, a year-on-year decrease of 1.2%. The production volume of corrugated base paper was 27.7 million tons, a year-on-year increase of 3.2%; The import volume was 2.41 million tons, the export volume was 10000 tons, and the annual consumption was 30.1 million tons, a year-on-year increase of 1.1%.

Due to factors such as demand and price, the import volume of cardboard and corrugated raw paper in the first nine months of this year reached 3.85 million tons and 2.54 million tons, respectively, an increase of 54% and 46%; The export volume of cardboard was only 70000 tons, a decrease of 15.5%, while the export volume of corrugated raw paper was only 14000 tons. The increase in import volume has also brought pressure to domestic enterprises in production and sales.

Based on the information and analysis we have, the expected completion volume of cardboard production this year is about 28.3 million tons, an increase of about 0.7%; The import volume is about 5.1 million tons, with an increase of over 40%; The export volume will not exceed 100000 tons; The annual consumption is expected to be 33.3 million tons, an increase of about 5%.

The production volume of corrugated base paper is expected to be 28 million tons this year, an increase of about 1%; The import volume is about 3.4 million tons, an increase of about 40%, and the export volume is very small; The annual consumption is expected to be 31.4 million tons, a year-on-year increase of about 4%.

7. Prediction of production and consumption of main varieties of paper and paperboard

5、 2023 Annual Production and Consumption Forecast

Based on the above data and analysis, we estimate that the domestic pulp and paper production and consumption for the entire year of 2023 will be:

1. The total production of paper and cardboard is about 127 million tons, a year-on-year increase of about 2.2%.

2. The apparent consumption of paper and cardboard is about 129 million tons, a year-on-year increase of about 4%.

3. The total production of pulp for papermaking is about 85.5 million tons, a year-on-year decrease of about 0.4%.

4. The consumption of pulp for papermaking is about 116 million tons, a year-on-year increase of about 2.2%.

6、 The overall trend of production and market in the domestic paper industry this year and next

Looking at the production and operation of the paper industry this year, despite the macroeconomic situation being stable, although paper production has also encountered difficulties such as weakened market demand and rising raw material costs, coupled with external environmental changes and other issues, the overall production and operation difficulties of the paper industry have increased this year, with increased downward pressure, especially a significant decline in economic benefits.

However, based on the policies released by the central government this year to boost economic development, the overall situation of the domestic economy gradually improving, and the GDP growth rate reaching 5.2% in the first three quarters of this year, it can be seen that the Chinese economy continues to operate within a reasonable range. In this context, combined with the positioning and role of the paper industry, it will still bring development space to the paper industry.

Based on the development trend of the domestic economy this year and combined with the analysis of the production and market trends of the paper industry this year, we believe that the domestic paper industry production and market will have the following performance in the next two years:

1. The overall production and operation situation of the paper industry shows a trend of low in the front and high in the back, gradually improving. The total production of paper and paperboard throughout the year still increases with the needs of economic development.

2. Due to weakened global market demand, intensified competition, and rising costs of raw materials and energy, the main business revenue of the paper industry will decrease this year, and the total profit will continue to decrease.

3. Due to the constraints of domestic native pulp production and the total amount of recycled waste paper raw materials, in order to meet the market demand for the total amount of paper and paperboard, production enterprises will continue to increase their demand for various imported pulp products.

4. Although China's paper-making products have achieved a basic balance between production and demand in recent years, due to factors such as increased market demand, adjustments in raw material policies, and prices, some products have become scarce again, resulting in a situation where import volume exceeds export volume.

5. Looking ahead to the situation of the paper industry next year, although there are still many uncertain factors in the external environment, there are signs of gradual improvement based on global economic data. According to the WTO, global trade in goods is expected to grow by 3.3% in 2024. As a major manufacturing country and its position in global trade in goods, it is destined to have a certain driving effect on the Chinese economy. In this context, as a supporting industry for numerous industries