Market outlook of bleached coniferous pulp under t

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Bleached coniferous pulp Market Outlook under the global economic recovery

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core tip: This article is based on the speech recording of song Wangqiu, President of Fenlin Group Asia Pacific region, at the 2021 China pulp summit held in Kunming on April 29. It takes about 8 minutes to read the full text. This article is based on the speech recording of song Wangqiu, President of finlin Group Asia Pacific region, at the 2021 China pulp summit held in Kunming on April 29. It takes about 8 minutes to read the full text. The PDF file of the speech is provided at the end of the text for downloading. Please operate according to the prompts

dear leaders, colleagues and friends in the industry, good afternoon! I'm very glad to have the opportunity to gather with our friends in the spring city of Kunming today to share information and discuss issues of common concern to all of us

the topic of the report I bring to you today is the market outlook of bleached needle pulp. Under the environment of global economic turbulence and gradual recovery, what will be the development trend of bleached needle pulp market? My report is divided into three parts. One part is looking forward to the future, especially after the COVID-19, what are the new changes and trends in the long-term market development of commercial wood pulp? Secondly, taking the global economic recovery as the background, this paper analyzes the short-term market development situation of commodity pulp, especially bleached needle pulp. Finally, I would like to report the latest progress of Fenlin Fenbao investment project

Introduction to the overall situation of the commercial pulp market

for the long-term development trend of commercial pulp, please refer to this figure (Figure 1), which is an analysis of the market structure of the main raw material pulp in the global paper industry. The total demand for pulps in the world is about 410 million tons, with primary wood pulp accounting for 44%, about 180 million tons, and recycled pulp accounting for 54%, about 220 million tons. If we remove non wood fibers and dissolved pulp, the ratio of raw wood pulp to recycled pulp is 45:55. About 60% of the original wood pulp is produced by integrated chemical plants, that is, especially outside China, many large paper mills have self-made pulp, which accounts for about 110 million tons. The total consumption of commercial pulp circulating on the market is about 70million tons, accounting for 39% of the total wood pulp. Commercial pulp includes broadleaf pulp, coniferous pulp, and high yield pulp, namely chemical mechanical pulp, etc. The market scale of coniferous commercial pulp is about 26million tons, and the market scale of broad-leaved pulp is larger, about 38million tons. The long-term development trend of these two parts of commercial pulp still has a certain growth. The market growth rate of broad-leaved pulp will be higher, with an annual growth rate of about 3%, and the growth rate of coniferous pulp is about 1.3%

if we put all the commercial pulp together, the annual net growth is about 1.6 million tons, which is equivalent to the annual capacity of a large-scale new pulp mill. According to the investment rate of adding a large pulp line every year, the new supply is basically consistent with the growth of market demand, of which the annual demand growth of needle pulp market is about 330000 tons

the above is a brief introduction to the overall situation of the commercial pulp market

development trend of commodity pulp market

01 "carbon neutrality" vision

next, let's take a look at the long-term development of the commodity pulp market, what changes need us to pay more attention to in the recent period, and what we need to constantly observe in the process of research and judgment in order to grasp the long-term trend in the future. In the long run, the main driving force for the growth of demand in the commodity pulp market comes from global economic growth, especially a series of global trends such as the rising proportion of the middle class in emerging markets, the improvement of consumption capacity, urbanization, consumption digitalization, which have not changed fundamentally under the epidemic

however, recently, in addition to the COVID-19, what other aspects we need to pay attention to and may have an impact on the long-term development of commercial pulp? One of them is the concept of "carbon peak" and "carbon neutralization", which is also a global consensus and vision familiar to everyone through the media recently. In the autumn of 2020, China's national leaders made a solemn commitment to the world that China's "carbon peak, carbon neutral". (Note: "China will strive to reach the peak of carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060." Information source: Station), in the relevant exchange occasions of global high-level leaders, we are also continuing to reiterate and refine our long-term goals in "carbon peaking and carbon neutralization"

as the Biden administration entered the White House, the first policy change was that the United States rejoined the Paris Agreement. After that, climate governance has become a very central topic in the international political arena. Countries have also announced the long-term goal of carbon neutrality. (Note: in response to climate change, 197 countries adopted the Paris agreement at the 21st session of the conference of the parties held in Paris on December 12, 2015. The agreement entered into force within one year, aiming to significantly reduce global greenhouse gas emissions, limit the global temperature rise in this century to less than 2 ℃, and seek measures to further limit the temperature rise to less than 1.5 ℃. Source: UN official)

our country has taken "carbon peaking and carbon neutralization" as a very important core content in the "14th five year plan" and "2035 vision". Although the specific strategies and implementation strategies need to be refined, from the perspective of global governance, climate governance is a topic that the world has reached a high degree of consensus. As the future strategic development direction, carbon neutralization will have a very far-reaching impact on the global politics, economy, people's lives and social development

It remains to be seen how carbon neutralization will affect the commercial pulp market, but here I want to mention two aspects that need our consideration and attention

The concept of carbon neutrality does not mean zero carbon emissions. The reason why it is called carbon neutralization is that carbon dioxide emissions will continue to maintain a certain amount, but we can reduce carbon in two ways:

1. Forests can absorb carbon dioxide

2. Develop carbon capture technology, that is, use a series of artificial means to reduce carbon, such as capturing and storing carbon dioxide after separating it from the air

relative to carbon emissions, forest carbon sink, carbon absorption and carbon capture are a reduction. The concept of carbon neutralization refers to adding the two together and the result is 0, which is a goal we want to achieve

this involves how to increase the carbon sink function of forest for carbon absorption and storage in addition to reducing carbon emissions. In the process of promoting carbon neutrality, considering the difficulties faced in achieving carbon reduction and emission reduction goals, such as the need for a large amount of capital investment, it is natural to think about how we can continuously improve the carbon absorption effect of forests. So now there are some voices, including those from the European Union and North America, saying whether we should increase the area of forests. If there are certain restrictions on increasing the planting area of forests, whether we should reduce the harvesting and utilization of forests, so as to increase carbon sinks. Therefore, in the medium and long term, the natural carbon sink function of Climate Governance carried by forests in the future will be paid more and more attention, and will be more and more used in various ways, such as taxation, which will bring certain restrictions on forest harvesting or forest utilization. This is a trend on the one hand, which needs to be verified by time

on the other hand, a lot of innovative investment is being made in wood fiber all over the world. The purpose is to replace fossil based raw materials with wood fiber, and produce and process a variety of products, including energy, textile fiber, and many other applications. For a long time in the future, the use of wood fiber will be more and more extensive, and more attention will be paid to it. The use of wood will continue to strengthen, which may also have a certain impact on our industry, which uses wood as raw material for commercial pulp

02 global supply chain security

now let's talk about supply chain issues. Whether it is due to geopolitics, the black swan incident, the impact of the epidemic, the challenges facing the global supply chain need to be reconsidered and concerned. In terms of logistics and supply, there have been many so-called black swan incidents recently, including sudden and short-term impacts such as industrial strikes, the shortage of shipping capacity caused by the epidemic, the Suez Canal incident, and hurricanes, which have posed certain challenges to the efficiency, accuracy and safety of the relatively mature supply chain formed in the world for so many years

recently, many multinational companies that rely on global supply chains are considering how to improve the security of the entire supply chain, including how to build and ensure diversified supply sources and increase relative safety stocks. Originally, in order to save working capital, the so-called JIT (justintime) supply concept was created and practiced, but now more consideration is given to JIC (justincase), that is, what to do in case of problems? In all aspects, we believe that for the sake of the safety of the global supply chain and re-examination, considering that commodity pulp, as a global bulk commodity, may also put forward certain requirements for the reconstruction of its supply chain and the new layout of its strategy. Especially for China, our dependence on commercial pulp will continue to increase in the next few years, so in terms of long-term development, I think you can continue to pay attention to and discuss these two topics

03 COVID-19

considering the long-term impact of covid-19 on the commodity pulp market, it should be said that China has made remarkable achievements in combating COVID-19, taking the lead in leading the global economic recovery. So for us, the economic life brought by the new crown, including the personal impact on each of us, is still different from other societies and economies outside China. Basically, all countries except China have suffered from the COVID-19 for a long time

it may be too early to analyze the impact of COVID-19 on social and economic life, including our industry, because we still have a long way to go before we completely get rid of covid-19. But now, we can use what we perceive and observe to make some trend thinking and assumptions

the epidemic, especially in regions outside Europe, America and China, has led to the closure of the whole society and brought great changes to everyone's work and lifestyle, and this change has lasted for more than a year. This has a direct impact on our commercial pulp, especially on the end products of commercial pulp

first of all, in terms of printing and writing paper, the impact on the United States is slightly smaller, but in the European Union and Japan, the demand for this part of terminal products can achieve better color effect, and the shrinkage is aggravated, because people work remotely, the demand for office paper will be reduced. In addition, the closure of supermarkets and hypermarkets has shifted to shopping, so the traditional advertising printing, especially the commodity publicity printing materials distributed home, has been greatly reduced. As a result, the demand in this area shrank sharply, reaching about 20%. Of course we will

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