Under the influences of global financial crisis, the prosperity of Chinese papermaking industry was rapid decline from the latter half of 2008 and to the bottom low in the fourth quarter of 2008. During November and December of 2008, many Chinese papermaking enterprises were lost as well as the price decline and the inventory increases. Besides, the trade protectionism in the international field gained ground, leading to fiercer competition in the papermaking industry.

Marked improvement had been achieved in Chinese papermaking industry in the first quarter of 2009 compared with that in the fourth quarter of 2008. A total loss existed in Chinese papermaking industry in the fourth quarter of 2008. After entering 2009, most enterprises had kept balance in the profits and losses in February except that some enterprises were still in loss in January. Many enterprises began to make profits in March. In general, most scaled enterprises had kept balance in the first quarter; some enterprises had made considerable profits. Certain gap needs recovering year on year compared with the previous years, but from the aspect of link relative ratio, the papermaking industry had made significant progress regardless of monthly or quarterly.

In the first quarter of 2009, many companies’ inventories in the high price period of 2008 had been basically absorbed, and the operation rate of the existing machines returned to the normal level. In the first quarter of 2009, the accumulative yields of Chinese machine-made paper and paper board were cut down by 0.21%, which were grown positively in February and March, having been reversed the decline trend year on year since May of last year.

The papermaking industry is in the middle and back end of the economic cycle, whose raw material industry determines its close relationship with the downstream consumption. For example, the bond paper and the newsprint paper are greatly affected by the advertisement, and the packing paper is closely associated with the exports and consumption. Therefore, the papermaking industry was benefited little in this round of economic growth dominated by the government investments. With the steady increases at home and abroad, the demands for the paper are expected to boom. The industrial revitalization policies may play an indirect role in the exports, driving the demands for paper.

Due to the related policy supports, the credit loan environment in Chinese papermaking enterprises began to unloosen. In addition, the high price inventories of Chinese major papermaking enterprises had been absorbed gradually. The pulp price in Chinese market had been increasing. In April 2009, the respective offering prices of the coniferous pulp, hardwood pulp and CMP were 610 USD, 525 USD and 495 USD per ton, increased by 29USD, 14.6 USD and 7.3 USD respectively. The wood pulp prices had begun to emerge from the bottom. It was reported that the global two major pulp producers, Arauco of Chile and Ilim Group of Russia, had announced they would enhance the prices for Chinese papermaking enterprises from 1st April 2009. Arauco Company would increase the BSKP price by 10 USD to 480 USD per ton. Ilim Group would increase the BSKP price by 30 USD to 450 USD per ton of the effective price delivered in the borders; the BHKP price will be increased by 20 USD to the effective price of 390 USD per ton delivered in the borders. The pulp price increases would result in the price growth of the paper products.

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