Paper market in the first 6-month of 2018

The price of pulp and paper in the world increased sharply in the first 6 months of 2018 as demand for pulp from China increased sharply and prices of energy and other materials used in paper production increased.

Impressive change of price in tissue products in Vietnam
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For pulp, the price of bleached pulp on the world market has risen 40% since China banned the use of scrap paper. Most of the major wood pulp producers Indonesia, Malaysia and Chile have raised pulp prices to China. US pulp prices have increased by more than 35% in 2017; Around six months (September 1977 - February 2018), the price of pulp increased by $ 240/ton (about 20%) to $ 700- $ 860/ton.

There are several reasons for the rapid increase in pulp prices, of which the most significant are: Demand for pulp (natural fiber) rises sharply after China's tighter control over raw material production (scrap paper) The prices of scrap paper, fuel, chemicals and other costs have increased; limited supply of raw materials in winter; Production fell in South America after some Brazilian pulp mill suffered a problem at a factory last year. Also, some large Indonesian firms find it difficult to purchase logs for pulp production due to more stringent environmental regulations; Demand from China increased after the country reduced the use of polluting materials, mainly scrap paper, will increase imports of pulp to offset the shortage of raw materials; Some major pulp mills in the world closed for a while to maintain machines, etc.

On paper prices, according to the comparison in two markets in Asia and Europe, paper prices rose in the first 6 months of 2018 due to increased production costs from the price of pulp, raw material prices, increasing paper prices, and stronge demands while yields are not catching up.

In China, May 2018 the industry have seen a surge in paper prices, particularly in the northern, eastern and southern regions of the country, where the major production was complete products such as paper, white-corrugated paper, canned paper .... China restricts the import of scrap paper that causes domestic scrap paper prices to rise, and paper mills also have to increase imports of paper pulp push the price of pulp in the country and the world increased. In the other hand, the price of ivory coated paper in China is down due to oversupply, especially the paper for the packaging of goods, folding boxes for consumer goods such as cosmetics and pharmaceuticals.

In Taiwan, hygienic toilet paper emerged as supermarkets raised prices by 10-30% since March as raw materials increased.

In India, printing and writing prices rose sharply in 2018, reaching approximate 65,000-68,000 per ton at the end of the first quarter of 2018 and continue to increase by 2-3% in 2019 (starting in April 2018) due to increased raw material costs.

In Vietnam, the price of paper materials increased right from the first 3-month of 2018 until now. Specifically, in June of 2018 paper prices increased in most categories. Compared with the end of March, 2018, the price of this paper has increased by 15% and a total increase of approximately 30% since the beginning of this year.

For printing press paper, prices are increased sharply. As of the end of February, the average price stood at VND2.2 million /ton and now it is still 15-20% higher for shipments by the end of August.

In particular, the paper packaging and packaging paper increased from the first quarter of 2017, the Chinese traders buy at prices higher than the domestic price of 1.5 to 2 million per ton, fluctuating VND11million to 13 million per ton depending on type, even though they still suggest to sign long term contracts and request to be paid in advance to return the paper. And so far there have been no signs of slowing down the paper cost increases.