Institutions: Profit recovery in the paper industry is further gaining momentum

Datong Securities believes that: 1) Whiteboard paper companies have issued price-increase letters in dense succession, and along with downstream demand gradually recovering, there is a higher probability that paper product prices will maintain an upward trend, further strengthening the impetus for profit recovery in the paper-making industry. 2) Pulp volumes and prices are moving in opposite directions. The impact on the cost side is relatively stable. Pulp futures inventories have risen slightly; futures prices have edged down. Prices of domestic bleached pine needle pulp and bleached broadleaf pulp have rebounded, while international pulp prices have shown some divergence. 3) Industrial clusters are taking shape at a faster pace, and the pace of high-end transformation is accelerating. Beihai High-End Paper has achieved capacity growth beyond 10 million tons, and Guangxi is accelerating the construction of a global pulp and paper industry hub, with the regional industrial cluster effects becoming more pronounced. 4) Focus on two main lines: pricing power elasticity and industrial cluster formation. With the industry currently expanding price increases, costs relatively stable, and industry upgrades accelerating, it is recommended to pay particular attention to packaging paper and specialty paper leaders with stronger price-increase expectations, as well as companies that have advantages in both integrated pulp-and-paper operations and regional cluster effects, to capture structural opportunities driven by profit recovery.

Orient Securities believes that: 1) Compared with the resilience on the demand side, uncertainty on the supply side is a more important factor driving pulp prices. At the current juncture, against the backdrop of geopolitical conflicts, rising energy prices could lead to lower operating rates at overseas pulp mills. Given the concentration of the pulp supply landscape, the impact of supply-side contraction may be greater than the downside from demand-side weakness, so pulp prices are expected to remain stable or even rise further. 2) The pulp supply landscape is concentrated, and China’s pulp consumption relies heavily on imports; supply-side disruptions may further push up imported pulp prices. 3) Against the backdrop of geopolitical conflicts, the oil price center has increased significantly. Rising energy costs may help extend the pulp price uptrend seen earlier.