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How’s the demand of pulp&paper after the impact of coronavirus(covid-19)?

The epidemic situation of the new coronavirus in China has been effectively controlled, but coronavirus has already broken out in other regions of the world. In addition to our country, Italy has also set up blockade and isolation measures.

Potential negative demand impact-FMCG growth slows

Worries about the virus are likely to affect consumer consumption patterns. From the perspective of pulp and paper, this trend will most directly affect packaging demand.

In the past, the post-holiday recovery difficulties caused by the virus in our country, the large-scale loss and even the closure of the tertiary industry such as catering, tourism, and supermarkets, as the virus entered other major countries (the Western country ’s tertiary industry accounted for a larger proportion May be more prominent), consumers may exhibit similar behavior.

Trend chart of the proportion of employment of tertiary industry in China

 

Trend chart of employment ratio of tertiary industry in the United States

 

This will mean that the growth of fast-moving consumer goods worldwide has slowed down, which indirectly affects the actual demand for packaging paper products.

Paper international trade impact-China may change from export restrictions to import restrictions

On the one hand, because the current overall demand in China has not been fully released, the demand for terminal packaging paper has decreased year-on-year (it can be found from the recent decline in the price of cardboard and corrugated base paper that the actual terminal demand is not sufficient), and the current packaging paper price reduction Mode, demand for imported finished paper slows down;

On the other hand, as the epidemic situation continues to erupt in various countries, it is likely to affect the import and export trade between countries in the future. China has basically achieved control of the internal epidemic, but international trade may still bring us a new round of imported disease. Perhaps our country may change from the previous export boycott to import restriction.

In the past 10 years, China's pulp imports accounted for 1/3 of the world's total imports. If the impact of the epidemic affects China's imports, the world's pulp market will face a new round of price pressure.

 

The picture below shows the pulp exporting countries mainly to China, and the pulp mills in these exporting countries may be affected first by the epidemic.


The epidemic may change the habit of using tissue paper around the world

Judging from the consumption habits of household paper, although the total consumption of household paper in China is huge, the actual per capita consumption data is still dwarfed compared with Western developed countries.

Household paper consumption distribution table (by country)

 


With the outbreak and continuation of this epidemic, the health and safety awareness of our people has been further improved, which may accelerate the increase in the per capita consumption of household paper in China, which will further increase the future demand for household paper. Another big growth point in the future.

 


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