According to the Zhitong Finance APP, Guotai Haitong released a research report stating that overall, with the peak season approaching, leading companies collaborating, and low levels of profitability and inventory, the price level of the paper industry chain is expected to continue to rise. Leading paper mills are expected to benefit from higher raw material self-sufficiency rates and economies of scale. It recommends Sun Paper (002078.SZ), which has a full industry chain resource layout and strong operational capabilities, Nine Dragons Paper (02689), which is a leader in corrugated box paper and is accelerating its integrated layout of wood and pulp paper, as well as leaders in segmented tracks.
<h2>Guotai Haitong's main points are as follows:</h2>
Waste paper prices are rising rapidly, and profitability is expected to continue to recover in August and September.
In terms of waste paper, leading companies are continuously raising prices, with accelerated implementation in August. On August 22, the price of recycled corrugated paper in various regions increased by 125-195 yuan compared to early July, with an increase of 110-170 yuan in August. The price of AA-grade high corrugated paper rose by 165-265 yuan compared to early July, with an increase of 135-220 yuan in August. In the past two weeks, the increase in paper prices has gradually exceeded that of waste paper, and profitability is beginning to recover. The firm expects paper prices to continue to rise in August and September, and the price difference will continue to expand.
Wood pulp prices continue to rise, and paper prices await increases during the peak season.
In terms of wood pulp, the domestic price of mainstream broadleaf pulp in various regions is 4160-4250 yuan/ton, an increase of 150-190 yuan/ton compared to early July. In August, external prices for broadleaf pulp from Suzano, CMPC, and others increased by 20 USD. This week, Suzano announced a price increase of 20 USD/ton for broadleaf pulp in Asia in September, with European and American prices rising by 80 USD/ton. The firm expects that the subsequent replenishment of paper mills during the peak season will continue to drive up broadleaf pulp prices, while finished paper prices are still awaiting stabilization, mainly due to weak demand during the off-season and expectations of new and resumed production capacity on the supply side. It is expected that as the industry gradually enters the peak season, paper prices are likely to transmit, and the profitability of integrated pulp and paper mills will recover.
Risk Warning: Disruptions in the overseas wood pulp supply chain, and downstream consumption demand falling short of expectations

002078

02689

601211

02611

The bank expects that the subsequent peak season for paper mills to replenish inventory will continue to drive up the prices of hardwood pulp, while the prices of finished paper are still awaiting stabilization

Zhitong

SUN PAPER

ND PAPER

Guotai Haitong

GTHT

Guotai Haitong: Waste paper system profit recovery, wood pulp system pulp prices continue to rise