--- title: "CICC: The paper industry is expected to recover in 2025, and supply-demand balance may 迎转机" type: "News" locale: "en" url: "https://longbridge.com/en/news/222490834.md" description: "CICC released a research report predicting that the paper industry will recover in 2025, with demand growing moderately under policy stimulus and the supply side at the tail end of the capacity cycle. The supply-demand balance for containerboard and cultural paper will be easier to restore, with pulp prices expected to fluctuate in the range of USD 550-650 per ton. Overall, the supply and demand in the paper industry are relatively balanced, with a slight adjustment in the prices of specialty paper and limited improvement in profitability. In the medium to long term, companies with high-quality forest land and pulp resources will become more scarce" datetime: "2024-12-17T00:24:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/222490834.md) - [en](https://longbridge.com/en/news/222490834.md) - [zh-HK](https://longbridge.com/zh-HK/news/222490834.md) --- # CICC: The paper industry is expected to recover in 2025, and supply-demand balance may 迎转机 According to the report released by China International Capital Corporation (CICC), looking ahead to 2025, the demand for paper is expected to recover moderately under the strong boost of policies aimed at consumption. The supply side is at the tail end of the capacity cycle, and the supply-demand balance for containerboard and cultural paper is relatively easier to restore. After stabilizing at the bottom, pulp prices may fluctuate mainly. In terms of stock selection, it is recommended to lean towards combinations with rich safety margins and a balance of offensive and defensive capabilities. ## CICC's main viewpoints are as follows: **Demand**: Recovery is expected under policy stimulus. As a pro-cyclical product highly sensitive to consumer demand, the demand for paper in 2025 is highly certain to benefit, especially with packaging paper and specialty paper expected to recover with a mid-single-digit year-on-year growth. The demand for cultural paper is expected to remain stable, supported by orders for textbooks and supplementary materials. **Supply**: The capacity cycle is at its tail end, and the landscape is changing. In 2025, there is pressure from new industry capacity, but it is slowing down. The firm estimates that the new capacity for containerboard and cultural paper will account for less than 10% of existing demand, while the expansion pressure for whiteboard and specialty paper is relatively high. Looking ahead to the whole year, the firm believes that the overall supply-demand situation for bulk paper is relatively balanced, with whiteboard prices likely still in a bottoming phase; the leading companies in specialty paper have relatively more capacity expansion for pulp and paper, and small enterprises may accelerate their exit, entering a critical period of reshuffling the landscape, which also tests the price stability capabilities of leading enterprises. **Prices and Costs**: The pulp-paper price spread is expected to widen again in the short term, with the firm predicting that the price of hardwood pulp will fluctuate in the range of USD 550-650 per ton in 2025. The firm believes that in Q4 2024 to Q1 2025, bulk paper prices are expected to remain strong under the catalyst of the seasonal shutdown of CHENMING PAPER and favorable policies. If pulp prices stabilize at the bottom, it means that the inventory costs for paper mills will gradually decrease over the next two quarters, and the profitability of bulk paper companies is expected to see moderate recovery overall; however, specialty paper prices have slightly adjusted since Q4 2024, making it difficult for profitability to improve significantly on a quarter-on-quarter basis. Looking ahead to 2025, the firm believes that the supply of commodity pulp will be relatively low, but there are still many self-use pulp projects in China and Southeast Asia contributing to new capacity, which may reduce the procurement volume of commodity pulp. The probability of pulp fluctuating in the range of USD 550-650 per ton is relatively high, and the impact of the pulp cycle on paper prices may weaken in 2025. **In the medium to long term, the scarcity of companies with high-quality forest land and pulp resources is increasing.** The firm estimates that from 2023 to now, global new commodity pulp capacity has exceeded 8 million tons (accounting for over 10% of the commodity pulp capacity in 2023). Looking ahead, the next large commodity pulp project may not be put into production until 2027, with no highly certain large projects in the meantime; considering the continuous growth of the global economy, upstream wood chips and pulp resources may become tight, and companies with high-quality forest land and pulp resources are favored. **Risks** Demand may fall short of expectations; new supply may exceed expectations; core raw material prices may fluctuate beyond expectations ### Related Stocks - [000488.CN](https://longbridge.com/en/quote/000488.CN.md) - [200488.CN](https://longbridge.com/en/quote/200488.CN.md) - [01812.HK](https://longbridge.com/en/quote/01812.HK.md) - [603863.CN](https://longbridge.com/en/quote/603863.CN.md) - [600567.CN](https://longbridge.com/en/quote/600567.CN.md) - [000815.CN](https://longbridge.com/en/quote/000815.CN.md) - [03908.HK](https://longbridge.com/en/quote/03908.HK.md) - [603230.CN](https://longbridge.com/en/quote/603230.CN.md) - [600640.CN](https://longbridge.com/en/quote/600640.CN.md) - [600308.CN](https://longbridge.com/en/quote/600308.CN.md) - [002717.CN](https://longbridge.com/en/quote/002717.CN.md) - [300860.CN](https://longbridge.com/en/quote/300860.CN.md) - [301231.CN](https://longbridge.com/en/quote/301231.CN.md) ## Related News & Research - [SES (ENXTPA:SESG) Could Be 35% Undervalued After IRIS² Milestone](https://longbridge.com/en/news/295687319.md) - [Zhejiang Shibao Plans RMB1.394 Billion Non-Public A-Share Issuance](https://longbridge.com/en/news/295334781.md) - [NovaRed Mining Inc. 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