What is the prospect of the papermaking peak season in October?

Entering October, the peak season of the papermaking industry officially started. The market expects that the leading paper companies will perform well under the stimulation of consumption nodes such as Double Eleven and the Spring Festival.

Many paper companies are cautiously optimistic about the Q4 market. With the arrival of the peak season of demand, the price of cultural paper is expected to rise, and there is no sign of shrinking in the scale of publishing bidding. A person from a leading paper packaging company said that under the stimulation of the Double Eleven promotion, the demand for cartons is expected to increase year-on-year. It is expected that profits in the fourth quarter will rebound compared with the third quarter.

It is reported that in the first three quarters of this year, the overall market of the papermaking industry was relatively flat, and the industry's profits continued to be under pressure, but thanks to the relatively stable price of raw pulp, the cost control advantages of leading paper companies gradually emerged, and profits were significantly restored.

There are many factors that cause gross profit differences. The so-called average gross profit of the industry is generally calculated from the pulp price and paper type price in the spot market, which represents the real situation of most small and medium-sized paper mills that cannot sign long-term contracts with overseas pulp mills, do not have pulp production capacity and have limited stocking capacity. They can only purchase pulp spot from domestic traders and sell it after processing. In the first three quarters of this year, demand was flat, and paper prices had no choice but to follow the rise and fall of raw materials. The profit space of small and medium-sized paper companies has not been opened.

But for the leading paper companies, thanks to the advantages of long-term contract orders, pulp production capacity and inventory management, their costs are often lower and they have the opportunity to obtain higher profits.

The inventory management of leading paper companies is different. "Each company has its own management method, so the profit difference is so large. This is the core secret of paper companies." The cost control performance is better. Some leading companies are ahead in the industry in scale and have laid out the forest pulp and paper integrated model earlier. Other leading companies are directly engaged in pulp trade, and their ability to cope with the rise and fall of pulp prices is also better than most comparable companies.

Standing at the starting point of Q4, the papermaking industry still faces considerable challenges. In the third quarter, the prices of cultural paper, white cardboard, and packaging paper all showed a downward trend. Combined with the expected release of new production capacity, it is expected that the pressure on paper prices to rise in Q4 will be relatively large. In this context, leading paper companies still have to compete in cost control to improve profits.