BEIJING, Aug. 19 /PRNewswire-Asia/ -- Himfr.com, one of China's leading B2B search platforms with more than 30 B2B industry websites to its name, analyzes paper market trends.
Himfr reports that this year the newsprint market has undergone great change, as Chinese newsprint manufacturers in January and in April increased prices twice, citing concerns about the cost.
In fact, Himfr regards the ups and downs of newsprint prices as normal.
Himfr analyzes that in 2009, the paper prices fell to 4,000 RMB. From 2005-2008, the irrational newsprint production capacity expansion and the Chinese oversupply of newsprint have been established. At present, Chinese newsprint market demand is about 3.5-3.8 million tons, while Chinese newsprint production capacity is about 4 million tons or more. This situation is very favorable for the newspaper industry, newsprint prices rose sharply under restrictions.
Newsprint prices will not significantly increase, and cost recovery is inevitable.
Himfr reports that 4,700 RMB is the normal newsprint price. Himfr predicts the newsprint price pick up for the following reasons.
1. Import waste paper prices rise with unstable supply.
Currently almost all of China's newsprint production uses waste paper as raw material; production of about 1 ton of finished newsprint requires 1.4 tons of waste newsprint, accounting for about 40-50% of newsprint production costs. As Chinese waste paper recycling systems are not perfect, China's large-scale newspaper mills basically use imported waste paper as raw materials.
2. Coal transportation prices increased sharply.
Paper industry is an energy-intensive industry, the production process largely uses electricity and heat. In 2005, the prices of Chinese coal were at a low level; after 2006, coal prices grew higher than before. Transportation prices along with fuel prices are rising.
3. Environmental protection costs increased.
4. Supply and demand will no longer play a role when prices are below cost.
Price is determined by supply and demand, but exceptions exist in both cases. When product is too high, users cannot afford the cost, and then seek alternatives. Conversely, when a product's price is lower than the cost, producers cannot afford to make it.
The combination of constraints on newsprint prices rises and pushes up the price according to these two factors. Himfr believes that newsprint prices will rebound to around 4,700RMB -- the normal state of the market. With the further improvement of the economy, do not rule out further increases to 5,000 RMB in the second half-year. General oversupply in the paper industry is relatively stable; the price trend depends mostly on supply.
(http://www.himfr.com/list-product-Packaging_Paper-24000000-1.html)
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