Waste Paper Import Tightens To Push Paper Price Up Continuously

- May 08, 2018-

Since May, the domestic finished paper market has ushered in a new wave of price increases. Behind this, it is a battle for waste paper raw materials. With the increasingly stringent import of waste paper policies, domestic waste paper has become the fragrant smell of paper mills and its value has skyrocketed. However, in the face of the high demand for waste paper by the paper industry, the domestic waste paper acquisition industry still faces the problems of insufficient scale and inconsistent standards. At present, the city has begun to carry out the construction of a regional recycling resource sorting center. After the completion of the new recycling system, it will guide the price of waste paper rationally.

Paper price starts a new round of rise

Recently, the price-raising letter from the paper mills has spread like a snowflake. According to incomplete statistics, since May, at least 32 paper mills have announced price increases, and the prices of corrugated paper, whiteboard paper, and grey-end whiteboard paper have all been raised. The rate of increase is between 100 and 300 yuan per ton.

More than a month later, all major e-commerce platforms will usher in mid-year sales promotion activities. E-commerce sellers have increased their demand for express cartons. Many sellers have already begun to purchase cartons in advance, facing the high demand for cartons and rising raw paper prices. Carton prices have also risen further.

The reporter learned from Shandong Huatai Paper that due to the shortage of raw materials, the price of newsprint has risen to 5,800 yuan per ton, up by 500 yuan from the third quarter of last year.

In fact, the prices of all kinds of finished papers have been rising since the beginning of last year, making the profitability of papermaking companies soar. The 2017 annual financial report of paper-listed companies shows that both revenue and net profit have risen sharply. Many companies even have growth rates exceeding 100%. In the first quarter of this year, of the 29 listed companies in the paper industry, 25 companies saw their operating revenues increase year-on-year. According to industry analysis, the price of finished paper will continue to rise with the arrival of the peak season for paper products.

Domestic waste paper prices continue to climb

The reason why the price of paper rises collectively is that, in addition to the demand for finished paper from the off-season shift to the peak demand season in summer, the most important behind-the-scenes promoter is the increase in the price of waste paper raw materials.

In China, whether it is the production of carton paper or newsprint, a large amount of waste paper is needed as a raw material. However, due to the limited recycling of waste paper in China, many paper mills rely on imported waste paper with lower prices for a long time.

In December last year, the new version of the "Imported Waste Management Catalog" was formally implemented. Unsorted waste paper was adjusted from import restrictions to imports. Since March of this year, the “Administrative Regulations on the Environmental Protection of Imported Waste Paper” has been implemented, and the enterprises that apply for importing waste paper licenses need to meet more advanced requirements, including production capacity and impurity rate standards.

On May 2nd, the State General Administration of Customs further issued an emergency document that stipulates that 100% of the waste raw materials from the United States shall be unpacked, and 100% of inspections and quarantine shall be carried out on waste materials from the United States starting from May 4th. The suspected thermosetting plastic waste shall contain powder. The metal scraps, waste papers with special papers that are difficult to be identified, and suspected hazardous wastes shall be subject to 100% laboratory testing and analysis.

A step-by-step oversight of supervision led to a continuous decline in the volume of U.S. waste paper imports. Paper mills have turned their attention to the domestic market and increased the amount of domestic waste paper purchases.

Master Hu, who collects waste products, currently purchases waste paper at a price of RMB 1.6 per kilogram, which has more than tripled compared to prices a year ago. “The waste paper that we started to collect last year has been reduced. The reason for the price increase is also the shortage of waste paper. After all, things are scarce,” he said.

In the circle of friends of a person in charge of Shandong Guihe Paper, new waste paper pricing information will be released every one or two days. Since the end of April, the purchase price of Class A waste paper has been raised from 2,520 yuan to 2,650 yuan per ton. Chen Yong, deputy general manager of Beijing Huajingyuan Recycling Resources Recycling Co., Ltd., said that the current price of waste paper is close to the highest point of last year: “If this year continues to rise, the waste paper price is likely to reach 3,500 yuan or even 4,000 yuan per ton.”

Fireworks prices continue to rise

Affected by the rising price of paper, the price of fireworks products also continues to rise. In order to maintain normal operation and ensure product quality, major fireworks manufacturers generally increase prices by 5%-20%. In fact, fireworks companies do not want to increase prices. There is really no way. They also know that price increases have a negative effect on the fireworks market.