Trends in the paper industry in the second half of 2024

The market conditions of the paper industry have rebounded significantly, and the profits of paper companies have been continuously restored.

Hong Qianjin, a researcher at China Research Institute, said in an interview with a reporter from China Business News that in the first half of 2024, the cost of raw materials will be relatively stable or decline, which provides major paper making companies with an opportunity to improve quality and efficiency and increase profit levels, and become an important driving force for the growth of paper companies' performance. At the same time, with the continuous release of the effects of macroeconomic policies, the rapid development of e-commerce, express delivery and other industries has further stimulated the demand for packaging  paperboard, and the prosperity of the paper making industry has rebounded, providing a broad market space for paper companies.

In the first half of 2024, market demand recovered and the prosperity of the paper making industry continued to improve. Affected by this, the performance of paper companies is impressive. Judging from the performance forecasts recently released by many paper companies, their net profits have turned losses into profits in the first half of the year.

Regarding the trend in the second half of the year, Hong Qianjin said that the second half of the year is generally the traditional peak season for the paper making industry, and domestic consumption is more active. Especially under the peak season benefits of holidays such as National Day and Mid-Autumn Festival, the demand for the packaging paper industry is expected to increase further.

Xu Ling, an analyst at Zhuochuang Information, analyzed that from the perspective of demand, the second half of the year is the traditional peak season for the market. The Mid-Autumn Festival, National Day, and e-commerce festivals have certain positive stimulations on domestic terminal consumption, thereby driving the demand for container board, which is conducive to the upward movement of paper prices. It is estimated that the total demand in the second half of the year will reach 18.28 million tons, an increase of 9.46% over the first half of the year. From an overall perspective, it is expected that the contradiction between supply and demand may be alleviated in the second half of the year, but the pattern of oversupply remains unchanged.

Although there is an expectation of an increase in demand for the paper making industry in the second half of 2024, the market is in a pattern of oversupply, and the industry risk factors are relatively large. It is expected that the industry's prosperity in the second half of the year will be in a state of slight fluctuation and recovery.

Dongxing Securities also believes that with the recovery of pulp prices and the arrival of the peak season in the second half of the year, paper prices will be supported. The profitability of paper and paperboard suppliers is expected to show a trend of further recovery.