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The Demand Of The Packaging Industry Is So Weak, Why Does The Upstream Companies Rise And Fall Freely?
Jun 11, 2018

    Over the past few days, the base paper has fallen again and again, the waste paper has risen slightly, the cardboard price has fallen rapidly, the cardboard price has remained stable, the large paper factory has stopped production, the supply and demand laws and the routine of ups and downs seem to be in chaos in this round. in fact, otherwise, all this comes from the sluggish demand!
Let's see why the base paper fell: the stock is too large.
    In the early stage, the delivery slowed down due to the high price of hard carriers. now the storage location is too high for falling price delivery, but without the support of the demand, it is still unable to deliver a large number of goods. even if the adoption of extreme measure leads to an increase in the downstream storage, it is only a physical transfer to another warehouse.
    Large inventory is due to poor sales, poor sales is due to insufficient demand!
After the recent upsurge of waste paper, it fell slightly and then rose slowly. why?
Foreign waste is difficult to import due to the relationship between national policies, which immediately drove up the national waste price. the reason given by the market is that waste paper is the core raw material of paper mills, and the import interruption will inevitably lead to a decrease in supply. under the condition that the demand of paper mills does not decrease, the price rise of waste paper due to insufficient supply is very reasonable. But if the supply is really insufficient, why has it fallen again?
    There are only two explanations: 1. there is not much demand; 2. artificially hyping the price of waste paper. Even if the demand is really strong and the supply is really insufficient, the price increase will not solve the problem.
But some time ago, it was true that the supply of waste paper was also tight. why? The supply of waste paper to the paper mill is insufficient. it is not that there is less waste paper, but that the capacity of the paper mill is seriously surplus. ten monks rob six cakes. of course, there is not enough cake, but only six monks in the temple need to chant Buddhist scriptures. Ten monks do not fight to solve their own problems, so they have to say that there are fewer cakes. therefore, to raise the cost of chanting Buddhist scriptures, the temple has to ask you to pay a high price for Buddhist activities. when the monks have finished, they do not leave, and they have to continue to pay the bill in the temple.
    Waste paper supply and carton demand two thin monks cannot afford to raise the giant Buddha of paper mill!
As long as the matching problem between production capacity and demand is not solved, such chaotic market conditions will continue and only the waistcoat will be continuously changed.
    Let's see if the small paper factory can hold on to the sharp price bumps of the big paper factory's round of waste paper and base paper at different frequencies.
It depends on whether the cardboard factory can step on the paper mill's price and the rhythm of the waves will not fall off the tide!
    Let's see if the tertiary factory can catch the wool of its customers together with the upstream or only the upstream wool!
    The soaring and plummeting market situation will only accelerate the reduction of carton demand, which will lead to the further improvement of the profit margin in the upstream ( the only way to increase the profit margin is to increase the profit margin ) and will continue to push back the demand. in this way, the strong in the reciprocating industry will remain strong and the weak will die out, leaving the giants fighting each other!
    Stabilizing the price system is the best way at present. as long as the base paper price is stable, the prices of waste paper, cardboard and cardboard will be stable, which will lead to stable profits in every link of the industry chain!
    However, under the current situation of serious overcapacity and sluggish demand, it is not easy to maintain a stable price.
    I'd like to ask you a word, the demand is so weak, why is the upstream courage to rise and fall freely?
    After all, moving bricks all the year round will hit your own feet!