The paper industry is a sustainable, green and low-carbon industry. Moreover, the cyclical and uninterrupted basic needs of daily chemicals, food and beverages that the packaging bears will not change. Although the demand for packaging paper from the footwear, clothing, toys, and furniture industries has greatly reduced, e-commerce packaging, more and more agricultural product packaging, and smart terminal product packaging have made up for this gap. It can be said that China's papermaking and packaging industries are both industries that are not settling down.
Secondly, the production capacity of the paper industry is relatively concentrated, and most of them are pillar enterprises in various regions. This is where the major paper industries dare to operate with high debt, and banks and governments have to unconditionally support them. If the business difficulties of the paper industry continue to deteriorate, local governments are likely to break this balance by eliminating a large number of small and medium-sized paper companies, thereby providing strong support for the price increase of raw paper.
In mid-August, with the sudden 3% depreciation of the renminbi, Southeast Asian countries depreciated their currencies drastically, frustrating their good hopes that this wave of devaluation would promote exports. If exports continue to decline in September, the continued devaluation of the renminbi will become a high probability event. In this way, the Chinese paper companies that have been forced into desperation have only one way to go-either to close down or to raise prices rigidly.
Finally, despite the fact that many color printing factories, carton factories and printing factories have expressed their inability to bear the price increase of base paper, the financial reports of 26 listed companies in the first half of 2015 show that the profitability of leading packaging and printing companies is quite dazzling, which proves that the packaging and printing industry has a strong interest in base paper. There is still a certain degree of affordability for price increases.
