RMB appreciation on China\'s positive and disadvantages Paper-Iota

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News > Dynamic industry > RMB appreciation on China\'s positive and disadvantages Paper

RMB appreciation on China\'s positive and disadvantages Paper

2014 is the most difficult of the past three decades of China's paper industry a year, corporate general faces stiff competition, falling prices, rising cost of financing difficulties. Of course, a piece of ice in the paper industry which, RMB appreciation foreign import pulp and waste paper to bring down the cost can be called one of the few positive.
Here, we explore the changes in pulp costs and product price relationships, analyze the profitability of paper products to enhance the cause and extent.
Appreciation of the renminbi is conducive to the paper industry
China's paper industry has raw material abroad, including the market situation, the main raw material for papermaking pulp and waste paper must rely on imports, while exports of a very limited number of paper products, wood pulp and waste paper prices will directly raise the price of China's paper industry production costs, reduce industry gross margin, while the RMB appreciation will reduce the adverse effects make this make our current paper industry has become rare in the industry to benefit from appreciation of the renminbi. RMB appreciation which effectively covers the pulp prices, but it is difficult to offset the negative impact caused by sharp price increases for paper.
Each paper prices varying degrees. Cost-push factor is the total price of all grades. Through nearly a year of change in the price of paper and its main raw material prices (in the same period exchange rate for the yuan-denominated) changes in contrast, can be seen in various kinds of paper, each sub-sector gross margin in the first half of this year will be significantly improved over last year.
Raw material prices and the appreciation of the renminbi
China's paper industry has raw material abroad, including the market situation, the main raw material for papermaking pulp and waste paper must rely on imports, while exports of a very limited number of paper products, is second only to the oil industry Dayong sinks. Pulp and waste paper prices will rise directly raise the cost of production of the paper industry, reducing gross margin, while the RMB appreciation will reduce the adverse effects make this makes the paper industry has become rare in our industry to benefit from the current appreciation of the renminbi . But for imported wood pulp and waste paper, the impact of RMB appreciation is not identical.
RMB appreciation largely offset pulp prices
Pulp prices affected by various reasons, including rising timber prices, oil, coal and other energy prices, and the resulting increase shipping costs.
However, due to the appreciation of the renminbi, the adverse effects caused by pulp prices are effectively covered. We are two pulp price chart for nearly a year and according to the income of RMB exchange rate of RMB against the US dollar price chart comparing by NBSK (a softwood pulp) and BHKP (a hardwood pulp), you can clearly the see this change.
From the above, we can clearly see that appreciation of the renminbi effectively reduce the adverse effects caused by imported wood pulp prices, which coniferous pulp prices was almost completely digested. Thus, we also see a problem at the current rate of RMB appreciation, raw material price increases, the faster, the less the proportion of RMB appreciation to offset the cost, it is for this reason that makes the face of waste paper prices, the appreciation of the renminbi appears to be very weak.
RMB appreciation match for waste paper prices
Imported waste paper mainly from developed countries and regions United States, Japan and Europe, in the face of increasing demand, the supply of waste paper is difficult to grow, resulting in a sharp price increase of waste paper. We selected a representative US spent 11 # 8 # US waste, calculated using the same method as wood pulp, you can see the price of RMB appreciation on paper, although there offsetting effect, but the effect is not so obvious.
In addition to a substantial appreciation of the renminbi is difficult to digest waste paper prices, we can also be seen from the figure, the more abrupt than the rise in the price of paper pulp prices, undulating, such as the United States spent 8 # in September 2007, rose in February 2008 and in June, the United States spent 11 # in September 2007, February 2008 rose rapidly falling since April, and. This makes it more difficult to predict changes in the price of waste paper, waste paper as raw material give paper companies in trouble - product price increases tend to have higher costs than the lag, the sudden sharp rise in raw material prices will effectively shift the cost of business before to bear alone the high costs and difficult for enterprises to make rapid and accurate judgments of future costs and product prices. Although sudden changes in waste paper prices, but for its future price we can still make some judgments based paper we mentioned earlier, the reason why the prices, we believe over time waste paper prices may still rise.
Rise compared with the paper pulp prices are much smoother, the face of the benefits of higher prices for wood pulp and wood pulp producers exporting brings, there is likely to lead to more investment, increase the supply of wood pulp the amount. Thus, it will make a long-term rise in pulp prices can stabilize.

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