Newsprint manufacturers increase prices and reduce

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"American waste" is causing paper manufacturers to increase prices and reduce pressure

American waste has been rising since last year, which is the main factor in the rise of paper prices. On April 2, Xu Huacun, the Board Secretary of Huatai Co., Ltd., told

American waste in Xuhua village refers to American waste paper, which is the main raw material for domestic paper production

according to what we have learned, as a leading enterprise in domestic paper production, the ex factory price of Huatai Paper rose from 5000 yuan/ton to 5400 yuan/ton in only one month in March this year, an increase of nearly 10%. Last year, the ex factory price of paper once remained at 4400 yuan per ton

however, such a rapid increase in prices did not bring much joy to the manufacturers: in fact, our comprehensive gross profit margin did not rise much. Xu Huacun said

us waste caused trouble

we have raised the price of paper since the second half of last year, but the range is not large. Since January this year, prices have been adjusted significantly, and the increase was the largest in March. An insider of Huatai shares introduced to

what drives the price of paper all the way up and determines its pace is beauty waste, which has only the hand of form

relevant data show that the price of Meifei No. 8 has been rising steadily since 2007. In the first half of 2007, the price of American waste was only $160/ton when it was the lowest. In the second half of 2007, the price of American waste rose from $180/ton in July to $240/ton in December, an increase of 50%. By the end of January, 2008, the domestic quotation of meizao No. 8 has reached the standard. The measurement and control system of material tension machine adopts 8-bit single chip microcomputer to control it to 250 US dollars/ton

Huatai shares are also subject to cost pressure. From January to February this year, the import of American waste from Huatai rose particularly sharply, from $220 per ton at the beginning of the year to more than $240, an increase of more than $20! The above Huatai stock person said

the raw materials used by major domestic paper manufacturers are basically American waste paper. Xu Huacun told that the proportion of American waste in the total cost of Huatai Paper was 60% - 70%. It was under the pressure of the price rise of American waste, which accounts for an important proportion of the cost, that Huatai made the price adjustment

at the beginning of 2008, raw materials rose rapidly, and the factory was under great pressure. Another domestic paper giant, Chenming Paper (000488 market, Guba) (000488. SZ), a person from the marketing department also said frankly. Like Huatai, Chenming has raised the ex factory price of paper since last year

the person further said that enterprises had made a substantial increase in paper prices at the end of 2007. Because generally speaking, paper sales are dominated by large orders, and the sales price in 2008 was set when the new contract was signed last year

debate of interests

despite the rising cost, the paper output of leading enterprises such as Huatai and Chenming has not decreased. However, a number of small and medium-sized enterprises have reduced production due to the rise in the price of raw materials and the narrowing of profit margins

Ye Yunyan, an analyst at Galaxy Securities, pointed out that due to the insufficient supply of raw materials and the sharp rise in prices, some manufacturers' paper businesses had to stop production or switch production. For example, Guangzhou paper, such as graphene based high-density porous carbon materials, and Hebei Fanya were all stopped production in 2008, resulting in a sharp decline in the effective supply of the market

the major newspapers prepared inventory in advance for the Olympic Games, which also led to a surge in demand for paper in the short term. The sudden amplification of market demand in the short term has greatly increased the bargaining power of paper manufacturers. In Ye Yunyan's view, this is another factor driving the price rise of paper

however, people from Huatai Co., Ltd. and Chenming Paper Co., Ltd. said that among the two major factors of the current rise in paper prices, the rise in the price of raw materials plays a far greater role than the change in the relationship between supply and demand

another good thing for paper production enterprises is the appreciation of the RMB. A relevant research report pointed out that if the RMB appreciated by 1%, the paper production cost could be reduced by 0.5%. Taking Huatai shares as an example, if other conditions remain unchanged, the RMB appreciation of 1% can increase the net profit of Huatai shares by 1.8%

but how much will the profits of enterprises like Huatai be affected by the rise in raw materials, the rise in product prices, and the appreciation of the RMB, because a single fixture can be applied to a variety of bar sizes

according to Xu Huacun, the increase in the price of Huatai Paper did not increase its comprehensive gross profit margin much. People from Chenming marketing department also said that the current profit margin of the enterprise is not large, and after the price rise, the profit should be similar to that before

the appreciation of RMB is definitely positive. The above Huatai insiders told. Although the company has not made specific calculations on the impact of these situations, which is nearly 20 times that of steel, he personally believes that the price rise force of raw materials should be much higher than the impact of other factors. From the annual report, the gross profit margin of our paper has been declining

according to the 2006 annual report of Huatai Co., Ltd., its paper sales increased by 52.73% year-on-year, while the cost increased by 69.56% year-on-year. In this case, its paper profit margin decreased by 7.15 percentage points to 24.78%

this trend continued further in 2007. According to the 2007 annual report, the sales of Huatai Paper increased by 45.34% again, while the cost increased by 59.34%, and the profit margin further fell to 19.09%

the cost of Huatai Paper is at the lowest level in the industry, and so is Huatai Co., Ltd., which can be imagined by other paper manufacturers

Wang Feng, an analyst at Guotai Junan, believes that through the analysis of supply and demand in the domestic market, domestic paper production enterprises are still facing greater market pressure. In his view, for paper production enterprises, although the rise in the price of end products can cover the rise in costs and help improve the gross profit level, it is difficult to obtain a higher profit level in the short term

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