Contradictions between supply and demand in the paper industry will gradually ease

In a global environment marked by sluggish economic growth and a slowdown in domestic activity, China's paper industry maintained a growth trend last year. While the balance between production and sales remained relatively stable, overall economic efficiency declined significantly, raising concerns about the industry's sustainability. The "12th Five-Year Plan" for the paper sector emphasized controlling capacity expansion and limiting the growth rate of new production lines. As a result, newly added capacity is expected to decrease this year. Lower profitability has also reduced the appeal of investment in the sector, leading to a projected decline in supply growth. However, as the economy gradually recovers, demand is expected to rise, easing the imbalance between supply and demand over the next two years. This year, the supply-demand dynamics are expected to improve for coated paper and linerboard, while white cardboard may face increased pressure due to new production capacity. The shift in some coated paper production lines toward cultural paper could intensify supply-demand tensions, though the impact from digital alternatives like e-books remains limited. Domestically, coated paper production is estimated to reach 7 million tons this year, up 9.4% from the previous year. Exports are expected to grow by 8.7% to around 1.5 million tons, while imports remain at approximately 300,000 tons. Annual consumption is projected to hit 5.8 million tons, reflecting a 9% increase. Despite challenges such as export restrictions and oversupply, future production of coated paper is expected to stabilize, with prices and profitability likely to bottom out. For cultural paper, uncoated printing and writing paper output is forecasted to reach 17.6 million tons, an increase of 1.7%. Imports and exports are expected to remain steady, while annual consumption is anticipated to grow by 0.8%. Although there won’t be much new capacity, some coated paper machines may be repurposed for offset paper. Demand for cultural paper remains relatively stable, though it faces long-term pressure from digital trends. Whiteboard paper production is expected to reach 14 million tons this year, up 4.5%, with imports at 75,000 tons and exports at 850,000 tons. Consumption is expected to rise by 5.1% to 13.9 million tons. While last year’s production and sales were stable, this year’s increased capacity may lead to more competition, making it difficult to achieve strong performance later in the year. Prices are expected to remain under pressure, possibly falling below 2012 levels. Containerboard production is expected to reach 20.7 million tons, up 4% from last year, with imports at 870,000 tons and exports at 70,000 tons. Corrugated paper production is projected to rise by 2% to 20.2 million tons, with consumption reaching 20.3 million tons. Though new containerboard capacity is limited, demand is expected to recover, potentially boosting prices and profitability.

Hanging Net

Hanging net

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