This week, Vinda Paper and Zhongshun Jierou, two giants in the household paper industry, successively issued notices of price increases starting on April 1. The reason for the price increase is the same, which is due to the recent continuous increase in raw material prices.

According to the "Securities Daily" reporter observation, affected by many factors, paper prices have been in the upward channel for some time. With the continuous increase in demand, the paper industry has also ushered in a high degree of prosperity, and the scale of corporate profits has continued to expand. Prices have yet to show signs of peaking.

In an interview with a reporter from Securities Daily, Jinding Assets Chairman Long Hao said that in the past two years, the price of paper has risen rapidly, especially after the Spring Festival in 2021. Papermaking companies give the main basis for product price increases.

"We believe that the price of pulp has risen from three aspects. On the demand side, with the gradual normalization of the prevention and control of the new crown epidemic, the overall rigid needs of daily life, printing and specialty paper have returned to normal, coupled with the background of carbon peak and carbon neutrality goals and Under the ban on plastics, the demand for paper substitution has increased rapidly; in terms of pulp supply, the policy of completely banning the import of stationary waste has prevented the import of waste paper and waste paper pulp, reducing the source of raw materials and leading to tight prices. The third aspect is the global The impact of monetary easing has also intensified the price increase of bulk commodities." Long Hao said.

The data provided by Nanhua Futures shows that since the beginning of November 2020, the Nanhua Pulp Index has continued to fluctuate upward, from 791.31 on November 2, 2020, to 1,283.47 on March 1, 2021, in 4 months. The increase reached 62.2%, followed by a high level of shock, as of March 24, the index was 1230.34.

In this regard, a senior researcher of Tonglian Data said in an interview with a reporter from the Securities Daily that the main reason for the recent increase in the shipment price of household paper companies-the price increase of pulp is based on the leading increase in pulp futures in the fourth quarter of 2020. The spot price increase.

“Previously, the spot price of pulp has been operating near the cost line for a long time. Subsequently, the completion of the China-EU investment agreement negotiations, global inflation expectations, the promotion of the new crown vaccine, and the marginal recovery of the global economy continued to ferment, forming a strong support for the increase in pulp prices.” The researcher Say.

At the same time, according to the "Securities Daily" reporter, since last year, benefiting from the continuous increase in paper prices, the A-share papermaking block has also ushered in a considerable increase. Relevant data show that the A-share papermaking block index (801143) has a rise of 22.1% in 2020, and has risen by 14.37% since the beginning of 2021.

As for the operating conditions of individual stocks in the sector, as of the press release on March 26, 14 of the 25 A-share papermaking stocks (classified by Shenwan industry) have issued 2020 annual performance forecasts. According to the type of performance forecast, The number of stocks that are expected to grow is 11, accounting for 78.57%.

In this regard, Long Hao said that with the impact of paper demand and raw material prices, the paper industry is expected to usher in an overall upward market in the future. Combined with the contribution of some companies’ new production capacity this year, leading companies have considerable room for performance growth, combined with environmental protection policies. With the increase of paper, the inevitable trend of paper replacement under the ban on plastics, the future output demand will increase exponentially, and companies with pricing power will usher in a period of performance explosion, and they can pay attention to the leading stocks with the ability to integrate pulp and paper.

"At present, with the increase in demand, the pulp price increase cycle will continue, and the probability of a fall within the year is small. From the perspective of the speed and magnitude of the price increase, under the influence of market speculation, combined with financial market futures arbitrage operations For small and medium-sized paper companies, every price drop is an opportunity to increase pulp inventory. At the same time, the advantages of leading companies will be further highlighted, especially some pulp and paper integrated companies are less affected by the increase in pulp prices. The cost advantage is obvious. In the future, the paper industry will further increase its concentration. The industry's competitive advantage will be tilted to leading enterprises, leading enterprises will increase their bargaining power, and industry consolidation will appear." Long Hao said.