After the end of the last round of price increases, in the beginning of 2021, the prices of various raw materials have soared, and the raw materials and cartons closely related to ceramic production have also risen sharply. Especially the price of carton used as packaging, after the Chinese New Year, the price of paper ushered in a situation of overall rise, and domestic and large paper mills have started the price increase mode. At present, a wave of price increases initiated by the original paper mills has quickly spread to the downstream cardboard box mills. According to incomplete statistics, in just one week from February 17 to 23, about 50 cardboard and carton price increase letters have flowed out of the market, covering Zhejiang, Guangdong, Jiangsu, Fujian, Sichuan, Hunan, Hubei, Henan, In Hebei, Jiangxi and other provinces and cities, the increase was generally concentrated at 5-8%. Among them, a carton factory in Jiangsu has a single increase of 25%. Why is the price of cartons rising so fiercely? The main reason lies in the following three main factors:

Prohibition of the import of waste paper: The Ministry of Ecology and Environment of China stated that starting from January 2021, the Ministry of Ecology and Environment will no longer accept and approve applications for the import of solid waste, which means that my country will completely ban the import of solid waste (including waste paper) in 2021. According to relevant data, in 2020, the domestic demand for waste paper pulp will have a gap of 3.8 million tons, and this gap will take some time to be adjusted by the market.

The newly issued “plastic ban” further increases the demand for cardboard paper. In particular, express delivery and e-commerce are required to reduce the use of plastic packaging, which promotes the consumption of corrugated boxes to a certain extent. The release of the new version of the plastic limit order brings new material requirements, and paper is currently the fastest and most effective replacement material. The demand for paper further increased.

Raw material pulp prices have risen sharply: The main pulp futures contract 2103 has risen from the lowest price of 4,620 yuan/ton on November 2 last year to the current (early February) highest price of 7,250 yuan/ton. In less than 4 months, the pulp futures price Increased by more than 2,600 yuan/ton, the rate was as high as 56.9%.

For ceramic factories that have resumed production or are about to resume production, the “full-line” increase in packaging prices will be a huge challenge, especially for ceramic companies that have stabilized their production. The person in charge of a number of ceramic companies in Zibo, Henan, Shenge and other production areas said that starting from the end of 2020, the price of packaging boxes will continue to rise, which will further increase the overall cost of products. And because of the above factors, prices will rise further, and because the price of cartons in China is much lower than the average market price, many factories choose to export directly abroad. It is foreseeable that this situation will continue for a long time. In order to prevent a sharp increase in prices in the short term, wellwares has reached a pre-purchase agreement with a cooperating carton manufacturer. We will pre-order the demand for cartons in the next period of time in advance. Ensure that the price of cartons within a period of time will not fluctuate.