The most popular price increase letter in Septembe

2022-07-26
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Is the price increase letter in September a dud

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core tips: as China Packaging entered September, the price increase letter also arrived as scheduled as in 2016 and 2017. At the same time, the CCTV finance and economics channel also reported the paper market on time. Just as Shenyin Wanguo Securities Analyst

[China Packaging] entered September, the price increase letter also arrived as scheduled as in 2016 and 17, In the same period, the CCTV finance and economics channel also reported on the paper market on time. Just as the analysts of Shenyin Wanguo Securities, they are all bullish, but the price increase and profitability will be slightly worse than in previous years! However, this year is not as good as in the past, and the market has never seen a rise. Is it the price increase mode in the peak season of the previous two years as scheduled, or is it the "whoosh" sound like a dud to continue the stagflation mode of 2018, which is "unable to rise and do not want to fall"

[forecast] price rise time node: September 17

important observation time node: September 17, 2018. Because the week beginning on the 17th is the last week before the three-day holiday of the Mid Autumn Festival and the penultimate week of the seven day National Day holiday, in order to cope with the delivery and stock preparation of these two festivals, it may set off a small upsurge of stock preparation, thus giving the market the impression that the peak season of great demand is indeed coming. Base paper mills and paperboard mills will use the order saturation state of this node to increase the heat of the whole demand and lay a foundation for rapid price rise

after the 7-day long holiday, the peak period of "double 11" e-commerce stocking is coming. On the one hand, stocking increases demand and drives orders to support the price rise. On the other hand, e-commerce packaging enterprises deliberately go to cardboard factories in large quantities to raise prices, realizing the strategy of buying cardboard at a low price and selling cartons at a high price

therefore, the week beginning on the 17th is an important observation point. Once the paper price is successfully pulled for a week, it basically means that a wave of price increases in the peak season can be successful. Otherwise, it will be difficult to find a suitable opportunity to pull up after the festival

demand for several factors that are not conducive to price rise: so far, there has been no sign of demand growth, especially the decrease in foreign trade orders caused by the continuous warming of the Sino US trade war, and the lack of domestic demand pull caused by the lack of consumer confidence caused by the reduction of residents' deposits. In addition, the growing pressure on the living environment of small and medium-sized enterprises this year has led to unstable enterprise benefits, further curbing domestic demand consumption

inventory: due to the superposition of factors such as the expansion of production capacity, the reduction of demand and the increase of foreign raw paper imports, the paper mill has a large inventory pressure, which directly leads to insufficient confidence in price rise, and dare not raise prices easily, so as to avoid making wedding clothes for peers. The pressure of high inventory on the paper mill is twofold. One is that the turnover space is insufficient. The other is that the speed of capital turnover slows down and increases operating costs. De stocking has become a short-term urgent matter

capacity: it is not only the excess capacity of paper mills, but also the serious excess capacity of paperboard and carton factories relative to demand according to GGII. Compared with the relatively controllable overcapacity of paper mills and carton factories, the serious overcapacity of paperboard factories has directly led to the fact that most secondary factories have no intention of raising prices in the case of insufficient orders. Not falling is the biggest demand. As long as the price of the paperboard factory can not rise, it is very difficult for the paper factory to rise. Although the paper factory has the pricing power, it is difficult to achieve any increase without a smooth price transmission mechanism

imported base paper: as the price difference between domestic and foreign base paper has existed for a long time, it will further stimulate some traders and paperboard factories to directly increase the import of base paper, reduce their dependence on domestic paper, and objectively put realistic pressure on domestic paper mills to increase prices

mentality: the price increase routines and reasons in the previous two years have been exhausted. The long-term game of cat and mouse has led to the enhancement of the immunity of downstream and end customers. Without the influence of large and identifiable external factors, it is difficult to impress the hearts of downstream manufacturers by repeating the previous methods. Everything is as plain as water

factors that may support the price increase

shutdown: in the face of high inventory, in order to maintain a good price situation and reduce risks, papermaking is a large-scale manufacturing → large-scale customization → interconnected factories are likely to continue the strategy of shutdown, price protection and de inventory, and then use the information of shutdown to create the phenomenon of supply shortage in peak seasons, so as to achieve the strategy of "killing two birds with one stone" to reduce inventory and increase prices

policy: Although the policy of full social security collection for all employees will begin in 2019, as many carton factories as small and medium-sized enterprises will face an increase in labor costs, which will affect the confidence of the sustainable operation of level 3 factories, with the implementation of the policy of reducing the people's burden and the burden on small and medium-sized enterprises in today's meeting of the State Council, the discussion on the implementation scheme of reducing the social security rate has given small and medium-sized enterprises hope to continue, This gives price support from the policy side

trade war: Although the Sino US trade war is still going on, and the $200billion boots are still hanging over our heads, seeing China's insistence on never giving in without principle and the arrival of the US mid-term elections, the US ruling party is facing electoral pressure and the possibility of losing the election, so it can adjust its strategy and open a new window for the trade negotiations between China and the United States. As long as the Sino US trade war can be reversed, If China's export confidence recovers, it will increase the demand for cartons and support the price rise

waste paper: in the face of the imported waste that has been reduced by 50% and the need to squeeze the survival pressure of small paper mills with high price national waste, the long-term increase can also gather more ecological enterprises to raise the national waste price. Once the demand rises, the national waste price will be raised again, creating a pretext that the cost will rise and the price will rise again

looking back, it shows that whether the price increase letter in September is a live shot or a dud depends on whether the demand will increase. What's more, the upstream strategy and the downstream response strategy are to continue the routine of starving the downstream to support themselves or to seek industry integration strategies to optimize the symbiosis and coexistence of the industrial chain

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