Paper producers in China experienced during first three quarters of 2013 weak market demand, causing production growth to slow and profit margins to narrow; paper and paperboard output up just 0.8% year-over-year: China State Administration of Statistics
December 5, 2013
(China Paper Online)
– 2, Problems in Production and Operation
Based on analysis on statistic express, in the first 9 months of 2013, pulp and paper & paper product sectors saw rather stable operation but they could not shake off the weak situation. It was embodied in weak market demand, drop of apparent consumption and slow- down in production, leading to lower profit margin. I t was also embodied in the pressures the paper sector was facing in grand economic environment.
The specific problems were as follows:
Production increase of paper & paperboard slowed down, so was the case with consumption
Jan –Sep 2013, China produced 87.6634 million mts of paper & paperboard, only edging up 0.83% year on year and the growth was lowered by 2.39% compared with entire 2012 as well as 6.97% from entire 2011. From statistic express, production of paper and paperboard from 16 provinces or cities such as Hebei, Henan, Hubei, Sichuan, Jiangxi, Fujian, Anhui and Shanghai tumbled year on year. Based on analysis on production and import and export, by the end of Sep, apparent consumption of paper & paperboard were 85.3566 million mts, dipping 0.21% year on year.
(2) Pulp producers were still in dilemma
Based on data from statistics express, Jan- Sep 2013, pulp production dipped 4.15% from same period 2012. Although pulp producers achieved 20.15% of growth in main operational business income, they suffered losses in total profits to 728 million yuan and the increase of losses was up 28% year on year.
(3) Net receivable grew
Jan- Sep 2013, net receivable by paper and paper product sector totaled 137.772 billion yuan, jumping 14.65% year on year. Among which, net receivable by pulp sector was 719 million yuan, slumping 25.25% year on year. Net receivable by paper and paperboard makers were 77.367 billion yuan, up 15.25% year on year. Net receivable by paper product sector was 59.686 billion yuan, jumping 14.62% year on year.
(4) The number of firms suffering losses and the loss volume both increased
Based on Data from Statistics express, by the end of Sep 2013, there were 1036 pulp, paper and paper product producers suffering losses, accounting for 14.47% of the totals. They recorded 7.185 billion yuan of losses in total, up 2.1% year on year. Among which, 23 pulp producers suffered losses, representing 37.7% of total firms to the amount of 1.16 billion yuan, up 28% year on year. 467 paper firms suffered losses, accounting for 16.09% of the totals and they recorded 4.781 billion yuan of losses, dipping 6.15% year on year. 546 paper product producers suffered losses, accounting for 13.02% of totals to the amount of 1.245 billion yuan, jumping 19.97% year on year.
3, Analysis and Prediction on Production & Consumption of Key Paper and Paperboard Grades in China
Based on data from China Paper Association in 2012 China produced 3.8 million mts of newsprint. It imported 130,000 mts of newsprint and in the entire year. China consumed 3.93 million mts of newsprint. Based on statistics from State Administration of Press and Publication, in 2012 China published 1918 kinds of newspaper, the total grades decreased by 0.52% from a year ago. 48.226 billion pieces of paper were printed, up 3.17% year on year and total paper printed were 221.1 billion, equivalent to 5.0853 million mts of paper, dipping 2.68% year on year.
According to statistics, Jan- Sep 2013, China produced 2.8 million mts of newsprint, dipping 4% year on year. Data from China Customs Agency showed, Jan- Sep 2013, China imported 97,000 mts of newsprint, dipping 1.29% year on year and China exported 49,800 mts of newsprint, jumping 1377.48% year on year. Apparent Consumption of newsprint was 2.85 million mts, tumbling around 5% year on year.
It is predicted that in 2013 production of newsprint in China dipped around 3% and total production of newsprint in the country was roughly 3.7 million mts. China imported 120,000 mts of newsprint and exported 70,000 mts of newsprint. Total yearly consumption of newsprint was some 3.75 million mts of newsprint, dipping 4.5% year on year.
2, booking /magazine paper
According to data from General Administration of Press and Publication, in 2013 414000 grades of books were published, surging 12.04% from 2011. 66.699 billion pieces of paper were printed, up 5.12%. 9867 magazines of various kinds were published, up 0.18% from 2011 and 19.601 billion pieces of paper were printed, up 1.7% year on year. A total of 2.0281 million mts of paper were used for both book and magazine publication, up 4.3% year on year.
Above data showed that in 2012 printing paper consumption grew within comparable range of data provided by State Administration of Press and Publication.
Jan- Sep 2013, China imported a total of 197,500 mts of uncoated writing and printing paper, slumping 30.06% year on year. China exported 936,600 mts of a/m product, jumping 31.74% year on year. Based on information that was available, there were fewer new projects on uncoated writing and printing paper, plus the fact that phasing out old capacity may lead to production cuts to certain degree, it was expected in entire 2013, production of uncoated writing and printing paper dipped some 2.2% from a year ago. Total production of the grade was 17.1 million mts and some 250,000 mts were imported, slumping 30% year on year. Some 1.25 million mts of uncoated writing and printing paper were exported, jumping 24% year on year. Consumption throughout 2013 was 16.1 million mts, dipping 4.4% year on year.
3, Premium Coated Paper
Premium coated paper was among the paper grades seeing quickest growth in recent couple of years and now China produced over 8 million mts per year. With better quality and development of color printing, consumption of premium coated paper has been on the rise and export took an upturn as well. Nevertheless, import volume was shrinking. As a result, many countries set up barriers to export of the grade from China. It is one of the paper grades that received most anti-dumping and anti subsidy investigation.
Based on statistics, Jan- Sep 2013 China exported 1.0253 million mts of premium coated paper, dipping 8.77% year on year. China imported 194,100 mts of premium coated paper in Jan- Sep 2013, slipping 10.05% year on year.
Due to block in export and slowing-down demand consumption in China, the competition became white hot in the country. Given macro economic conditions in the country, it is expected in 2013 production of premium coated paper would be flat from 2012 to around 6.9 million mts, the growth of which was slipping. China was expected to export around 1.3 million mts of premium coated paper, tumbling 10% year on year and import some 250,000 mts, dipping 8% year on year. Consumption throughout 2013 would be 5.85 million mts, flat from a year ago, or little bit higher.
4, Tissue Paper
In recent two years, as there were projects just completed and many more new projects or projects in pipe lines, new tissue paper capacity hit nearly 2 million mts. The fast capacity expansion and unbalanced market situation gave negative feelings in the market and worsened competition.
Based on statistics, in 2012 China produced 7. 8 million mts of tissue paper, up 7.59% year on year. China exported 530,000 mts of tissue paper, dipping 18.46% year on year. Tissue paper consumption for 2012 was 7.31 million mts, jumping 8.46% year on year.
Jan- Sep 2013, China imported a total of 25000 mts of tissue paper, down 6.74% year on year and aggregated export of tissue paper by China was 437300 mts, jumping 14.93% year on year. It is expected throughout 2013 total tissue paper production in China will hit 7.9 million mts, up 1.2% year on year. China imported 35,000 mts of tissue paper, down 12% year on year. Export of tissue paper in 2013 will be 580,000 mts, up 10% year on year and consumption throughout 2013 will be 7.35 million mts, up 1% year on year.
In 2013, boxboard market in China was stable and there not many new capacities.
Based on statistics, in 2012 China produced 13.9 million mts of boxboard, up 3.73% year on year. China exported 830,000 mts of boxboard, tumbling 14.4% year on year. China imported 720,000 mts of boxboard, down 8.86% year on year. Throughout 2012 total boxboard consumption was 13.79 million mts, up 4.31% year on year.
Jab-Sep 2013, China imported a total of 514,700 ms of boxboard, dipping 8.18 % year on year and exported a total of 807,400 mts of boxboard, jumping 30.9% year on year. From import and export trend in first 9 months, the import volume remained at around 60,000 mts without any change. In terms of export, monthly average export volume was some 90,000 mts, a surge from same period 2012.
In it expected throughout 2013, boxboard production will drop some 3% year on year to around 13.5 million mts. Import volume will be 700,000 mts and export volume will be 1.05 million mts. Consumption throughout the year will be 13.1 million mts, dipping some 5 % year on year.
6, Linerboard and Corrugating Medium
In 2012 China produced 20.8 million mts of linerboard, up 4.52% year on year. China imported 840,000 mts and exported 70,000 mts in the year. The consumption in 2012 was 21.57 million mts, up 4.05% year on year. Production of corrugating medium was 20.2 million mts, up 2.02% year on year. China imported 140,000 mts of corrugating medium and exported 70,000 mts of corrugating medium in 2012. The consumption was 20.27 million mts, up 1.81% year on year.
Jan- Sep 2013, China imported 621,600 mts of linerboard, dipping 4.81% year on year and exported 112,500 mts of linerboard, surging 131.07% year on year. Import of corrugating medium was 62,000 mts, slumping 44.59% year on year and export volume was 56,000 mts, jumping 22.01% year on year.
It is expected in 2013 production of linerboard will drop some 1.5%. Production will hit 20.5 million mts. Import volume will be around 800,000 mts and export volume will be 150,000 mts. Consumption will be 21.1 million mts, dipping 2.1% year on year. It is expected in 2013, production of corrugating medium will be down 1%. Production will hit 20 million mts. Import volume will be some 80,000 mts and export volume will be 70,000 mts. Consumption in the year will hit around 20 million mts, dipping 1.3% year on year. (Part 3 to follow)