Introduction. May 2016

Transcription

1 May 216 Introduction Contact RISI UM Pulp Analyst Alisa Ma In April, global pulp shipments dropped 12.3% month-on-month to million tonnes, yet inched up.6% year-on-year. The shipment/output ratio fell to 89%. By the end of May, total pulp inventories at the Qingdao port increased 19.8% month-on-month. Inventories at the Changshu port moved up 1% compared with the April levels, and the pulp tonnage held inside and outside Baoding warehouses decreased 27% month-on-month. Contract prices for imported bleached softwood kraft pulp (BSK) went up by $2/tonne in May. Movements of the grade s spot prices were mixed. Imported bleached hardwood kraft pulp (BHK) prices increased by $1-2/tonne in May, and hikes will be continued in June. Bleached chemi-thermo mechanical pulp (BCTMP) prices jumped due to tight market supply. In May, nonwood pulp prices saw small fluctuations. With wood pulp prices climbing, bamboo pulp prices picked up, yet bagasse pulp levels dipped. Reed and straw pulp prices remained flat. BSK imports in April edged up 1% month-on-month and grew 8% year-onyear. BHK imports in the month fell 13% month-on-month and decreased 8% year-on-year. Unbleached softwood kraft pulp (USK) imports slipped 4% month-on-month and dropped 6% year-on-year. BCTMP imports went down 22% month-on-month and declined 11% year-on-year. 8 7 Figure 1 Imported Pulp Price Index (US dollar/tonne) BSK BHK USK BCTMP Copyright 216 RISI, Inc.. All rights reserved. No part of this publication may be reproduced without the written permission of the copyright owner. 5,8 5,3 4,8 4,3 3,8 3,3 2,8 Figure 2 Domestic Pulp Price Index (RMB/tonne) UM Paper is a fully owned subsidiary of RISI Inc. with offices in Beijing in Shanghai BSK BHK USK BCTMP Bagasse Bamboo

2 May 216 Supply Global pulp inventories Figure 3 Global Pulp Shipments and Inventories 5, 4, 3, 2, 1, Global pulp inventories( tonnes) Global producer inventories(days) Source: RISI Global pulp deliveries declined by 12.3% to million tonnes in April, down from million tonnes in the previous month, according to Pulp and Paper Products Council (PPPC) data released today. Shipments were.6% higher than the year-earlier period, up from 3.88 million tonnes logged in April 215. Bleached softwood kraft (BSK) pulp shipments fell from 2.11 million tonnes in March to million tonnes in April while bleached hardwood kraft (BHK) pulp deliveries slid from million tonnes in March to 1.86 million tonnes last month. Global producer inventories stood at 36 days of supply in April (28 days for BSK and 44 days for BHK), two days less than the previous month but two days more than in April last year. Inventories at domestic main ports Figure 4 Inventories at domestic main ports ( tonnes) Qingdao Changshu Baoding At the Qingdao port, pulp inventories totaled 435, tonnes at the end of May, according to contacts at the port. Inventories inside the port increased 19.8% month-on-month to 195, tonnes, and some 24, tonnes were outside the port. Of the inventories, BSK, BHK and BCTMP took up 36%, 57% and 7% respectively. Shipments from the port increased in May, as downstream paper mills were busy with production after receiving big orders from printing houses, which needed large amounts of paper to print school materials for the new semester starting from September. Some pulp cargoes were expected to arrive at the port at the end of May or in early June. Pulp inventories at the Changshu port were around 352, tonnes, increasing 1% from the end of April and up 36.4% year-on-year. Sources said that some 36, tonnes of pulp arrived at the port in May, and shipments also increased in the month. In Baoding, the No. 132 warehouse and the Mancheng warehouse had a total of 66 freight wagons of pulp by 216 RISI, Inc. All rights reserved.

3 May 216 the end of May, with 4 freight wagons at the former and 26 freight wagons at the latter. Stocks in Baoding decreased 27% month-on-month. Since the maintenance at some Russian pulp mills cut market supply, the tonnage arrived at the two warehouses also decreased. In the meantime, shipments from the two warehouses were also slow in May due to the weak demand from downstream buyers. Scheduled output of domestic pulp Figure 5 Monthly BSK Scheduled Output (Non-exhaustive) Figure 6 Monthly BHK Scheduled Output (Non-exhaustive) BSK( tonnes) BHK( tonnes) Domestic BSK output was almost nil in May. At Asia Symbol (Shandong) Pulp and Paper, its Pulp Line 1 switched to make BHK in the month after producing some BSK in late April. It is estimated that it will again start making BSK from June 1. Two fiber lines at Yunnan Yunjing Forestry and Paper both produced BHK in May, and the pulp line Hunan Tiger Juntai Pulp and Paper made dissolving pulp. In May, BHK production increased 17% month-on-month, flat at the levels in the same period of last year. Yunnan Yunjing and Asia Symbol both made BHK on their fiber lines in the month. But Asia Symbol s output was reduced by 35, tonnes due to the maintenance-related downtime on its Pulp Line 2. At Guangdong Dingfeng Paper, its fiber line also suspended production on May 16 for maintenance, and the line restarted on May 24. After Oji (Jiangsu) restarted its 5, tonne/yr BHK pulp line in late April, the line s production steadily ramped up. At Guangxi Jingdaxing Paper, its pulp line ran below capacity because PMs at the paper mills nearby were still offline, and wood chips were also in short supply in the region. In Hainan province, Jinhai Pulp & Paper ran its pulp line at full capacity in May Figure 7 Monthly USK Scheduled Output (Non-exhaustive) Figure 8 Monthly BCTMP Scheduled Output (Non-exhaustive) USK( tonnes) BCTMP( tonnes) Domestic USK output decreased 24% month-on-month and plunged 64% year-on-year in May. Yunnan Yunjing 216 RISI, Inc. All rights reserved.

4 May 216 made BHK instead of USK in the month. In China, there are few USK pulp lines, whose production costs are relatively high. Compared with imported USK with higher quality, the domestic grade has not been competitive enough. Domestic poplar BCTMP production grew 4% month-on-month and rose 25% year-on-year in May. The rising imported mechanical pulp prices have also driven up the output of the grade domestically. APP Jingui Pulp & Paper s BCTMP production increased in May. At Jiaozuo Ruifeng Paper and Puyang Longfeng Paper, their pulp lines also ran at full capacity in the month to meet the increasing demand. The two mills have received so many orders that some may not be arranged for production until July. Table 1 Dynamics of Domestic Wood Pulp Producers (Non-exhaustive) Producer Capacity ( tonnes/year) Production Schedule(tonnes) Operating Rate Softwood Pulp Remark Guangxi Nanning Phoenix Pulp & 15 % Shut down Paper Hunan Juntai Pulp & Paper 3 % Shifted to dissolving pulp Yunnan Yunjing Forestry and Paper 25 % Shifted to BHK Asia Symbol (Shandong) Pulp & Paper 3 % Shifted to BHK Hardwood Pulp Yunnan Yunjing forestry and paper % Guangxi Heda Paper Industry 75 % Zhanjiang Chenming Pulp & Paper 1, 85 12% Guangdong Dingfeng Paper % Maintenance from May.16 to May.23. Asia Symbol (Shandong) Pulp & Paper 2, % Pulp Line #2 Maintenance from May.9 to May.13.. Guangxi Liuzhou Liangmianzheng % Paper Guangxi Jindaxing Paper Industrial % For self-use only Guangxi Fangchenggang Hongyuan % Pulp & Paper Jiangsu Oji Paper % Henan Baiyun Paper 12 % Maintenance Jinhai Pulp and Paper 2, % Chemi-mechanical Pulp Puyang Longfeng Paper % (Whiteness 75-8%) Shandong Zhong Mao Sheng Yuan 1 5 6% (Whiteness 75-8%) Pulp Shandong Zhengda Paper % Mostly for self-use Jiangsu Jinlida Paper 6 3 6% Run as low rate Hunan Chenzhou Yunong Paper % Guang Xi Jingui Pulp&Paper % Henan Jiaozuo Ruifeng Paper % Whiteness 75-8% Fujian Tengrongda Pulp 45 % Whiteness 75-8% Unbleached Pulp Hunan Huitong Baoqing Hengda % Paper Inner Mongolia Nine Dragons 8 % Produce Kraft Paper Xing an Pulp &Paper Yunnan Yunjing forestry and paper 25 % 216 RISI, Inc. All rights reserved.

5 May 216 Figure 9 Monthly Bagasse Pulp Scheduled Output (Nonexhaustive) Figure 1 Monthly Bamboo Pulp Scheduled Output (Nonexhaustive) Bagasse pulp( tonnes) Bamboo pulp( tonnes) In May, bagasse pulp output dipped 1% month-on-month, and fell 22% year-on-year. Due to the weak market demand for the grade and the tight supply of bagasse, some bagasse pulp mills had to reduce production. Pulp lines at Guangxi Yongkai and Guangxi Huaken have been idle for several months. The domestic bamboo pulp output rose 1% month-on-month, and also recorded an increase of 16% year-onyear in May. China s biggest bamboo pulp producer Guizhou Chitianhua Paper took a 7-day downtime in late April, cutting its production in the month. Production at the mill resumed normal in May, and the total output of the grade in the country also increased accordingly Figure 11 Monthly Reed Pulp Scheduled Output (Nonexhaustive) Figure 12 Monthly Straw Pulp Scheduled Output (Nonexhaustive) Reed pulp( tonnes) Straw pulp( tonnes) In May, the output of straw pulp and reed pulp was flat at the April levels. A lot of small lines have been shut down in the past several years due to tightening environmental measures, and demand for the grades also decreased in the country. Only a few straw and reed pulp lines are still in operation, and most are integrated with the paper and board machines. Little output from the lines is sold on the market. 216 RISI, Inc. All rights reserved.

6 May 216 Table 2 Dynamics of Domestic Nonwood Pulp Producers (Non-exhaustive) Producer Capacity ( tonnes/year) Production Schedule(tonnes) Operating Rate Remark Bagasse Pulp Guangxi Fengtang Luzhai Paper % Wet pulp Guangxi Laibin Eastern Sugar Paper % Wet pulp Guangxi Hengxian Guangui Sugar % Wet pulp Industrial Guangxi Boguan Paper % Wet pulp Guangxi Yangpu Nanhua Sugar Industry Group Yunnan Yangpu Nanhua Sugar Industry Group Guangxi yongkai Sugar and Paper Group Guangxi nanning Huaze Pulp & Paper Guangxi yongxin Huatang Group Laibin Paper % 3% for self-use % Pulp board 95 % Maintenance from Mar % More than 8% Pulp board % Guangxi Huaken Paper 14 % Maintenance from the end of Jan Bamboo Pulp Sichuan Xilong Paper % Bleached Bamboo pulp line is not in production Guizhou Chitianhua Paper % Sichuan Yongfeng Paper % Lee & Man Paper Manufacturing (Chongqing) % Guangxi Hwagain Group % For self-use Guangxi Jinrong Paper % For self-use Sichuan Qianwei Fengsheng Paper % Yunnan Yunjing Forestry and Paper 25 % Produce wood pulp Hebei Cangzhou Lingang Zitong Paper Liaoning Panjin Zhenxing Ecology Paper Straw Pulp % Unbleached wet pulp Reed Pulp % Hunan Huayao Pulp & Paper 5 % 5% for self-use Market Review Softwood Pulp Contract prices for imported BSK continued rising in May, and the grade s spot prices were generally flat. UMPaper price indexes showed that the contract BSK price was $596/tonne, up 3.5% month-on-month yet down 1.2% year-on-year; and the resale price was RMB 4,485/tonne($683.96/tonne), slipping.2% monthon-month and down 4.1% year-on-year. 216 RISI, Inc. All rights reserved.

7 May 216 Figure 13 UMPaper Imported BSK Price Index (US dollar/tonne) Russian NBSK N.Amer NBSK Radiata Pine The recent maintenance-related at some Canadian BSK producers directly cut the market supply of the grade and drove up its prices in the quarter. Demand for the grade from tissue mills and printing and writing paper plants was stable, and production at these mills was at normal levels. Moreover, sellers have been determined to press for hikes because of the appreciation of the Canadian dollar against the greenback. On the contract market, sellers tried to push up prices by $2/tonne in May, and the hikes went through successfully. At the end of the month, Ilim and Arauco decided to continue raising prices by another $2/tonne. However, the attempts were not well accepted on the market, and sellers have to cut the hikes to $1/tonne. Canadian BSK producers have not announced new prices. Figure 14 UMPaper Domestic Imported BSK Price Index (RMB/tonne) Figure 15 UMPaper Domestic BSK Ex-factory Price Index (RMB/tonne) 5,4 5,2 5, 4,8 4,6 4,4 4,2 4, 5,2 5,1 5, 4,9 4,8 4,7 4,6 4,5 NE. China N. China E. China BSK On the spot market, BSK prices did not rise too much, and the movements in different regions in China were mixed. In the northeastern and northern markets, many small tissue mills use BSK especially Russian BSK. However, the general operation rates of local tissue makers have been low in the past months because of the high tissue inventories at the mills. In addition, due to the price gap between BSK and BHK, tissue mills there have adjusted the ratio of BSK to BHK in furnish during production in a bid to cut costs. Of the pulp furnish, mills have reduced the usage of BSK, from the previously 6%-7% to the currently 3%-4%. Thus, with the sales of the grade slowing down, BSK supply in the two regions has been ample currently. In East China especially Shandong, Zhejiang, Jiangsu and Shanghai, printing and writing paper makers consume a lot of BSK. Since the maintenance at Canadian mills reduced market supply, and printing houses made big orders for paper to print school materials, BSK demand in the region became strong in May. Some traders announced hikes in the month. 216 RISI, Inc. All rights reserved.

8 May 216 Hardwood Pulp Imported BHK prices bottomed out in May. The contract price rose 2.9% month-on-month to $52/tonne, yet still recorded a drop of 2.6% year-on-year. The resale price reached RMB 4,11/tonne, up 1.6% month-onmonth yet down 14.6% year-on-year. Figure 16 UMPaper Imported BHK Price Index (US dollar/tonne) Eucalyptus(from Brazil and Chile) Russian BHK Mixed HW The upward movements of BHK prices were primarily driven by the demand-supply relation and market players efforts. Several major BHK mills took downtime in the past three months, curtailing supply globally. In the meantime, BSK levels became strong when BHK prices lingered at low levels, so some mills in China increased their usage of BHK to reduce production costs, which improved market demand for BHK. BHK prices dropped to a seven-year low at the end of April, hitting the expected levels of market players. In addition, there were some worries about the pulp import market because more new capacity is coming online overseas. Klabin in Brazil is ramping up the production on a new 1.5 million tonne/yr BHK line, although the line s output has not been markete, and APP will start up a new 2 million tonne/yr BHK line at its OKI mill in Indonesia in the second half of this year. In the eyes of market players, it was time in May to narrow down the price gap between BHK and BSK when existing BHK lines cut production and new capacity had not hit the market. In this context, many buyers in China accepted the hikes. On the contract market, sellers tried to raise BHK prices by $ 2/tonne in May. However, the implementation of the hikes progressed slowly. It finally went through partly at the end of May when both sellers and buyers agreed on an increase range between $1/tonne and $2/tonne. Figure 17 UMPaper Domestic Imported BHK Price Index (RMB/tonne) Figure 18 UMPaper Domestic BHK Ex-factory Price Index (RMB/tonne) 5, 4,5 4, 3,5 4,8 4,6 4,4 4,2 4, 3,8 3,6 3,4 NE. China N. China E. China BHK 216 RISI, Inc. All rights reserved.

9 May 216 Spot BHK prices did not see obvious changes in the month. With demand for BHK picking up, shipments of the grade also increased. Some traders tried to raise spot prices a little bit. Sales of domestically made BHK also improved, and mills tried to push up prices by RMB 5-1/tonne. Unbleached Kraft Pulp USK prices were flat in May. UMPaper price indexes showed the grade s contract price was $58/tonne, flat both month-on-month and year-on-year. The spot price rose 1.5% month-on-month to RMB 4,7/tonne, also registering a year-on-year increase of 6.8%. Figure 19 UMPaper Imported USK Price Index(US dollar/tonne) USK(Chile) In May, contract USK prices went up steadily. Arauco, the Chilean USK supplier, announced at the end of April that its list prices for May contracts were flat at $ 58/tonne. Due to the tight market supply and rising bleached pulp prices, sellers have decided to raise their list prices for June by $2/tonne for Arauco and Ust-ilimsk. Figure 2 UMPaper Domestic Imported USK Price Index (RMB/tonne) Figure 21 UMPaper Domestic USK Ex-factory Price Index (RMB/tonne) 6, 5,5 5, 4,5 4, 6, 5, 4, 3, 2, 1, E. China USK On the spot market, USK was in short supply, and prices continued moving up. Traders tried to raise prices by RMB 5/tonne to RMB 4,7/tonne for Arauco UKP and George Prince, and list prices for the grade in reel from the USA and slurry pulp from Japan also edged up a little. However, the market saw few transactions due to the high prices. 216 RISI, Inc. All rights reserved.

10 May 216 BCTMP BCTMP prices kept rising in May. According to UMPaper price indexes, contract price for softwood BCTMP was $413/tonne in May, up 6.4% month-on-month, yet down 2.2% year-on-year. The resale price rose 11.5% month-on-month to RMB 3,4/tonne, also registering a year-on-year increase of 1.1%. Figure 22 UMPaper Imported BCTMP Price Index (US dollar/tonne) BCTMP(Softwood) Canadian BCTMP mills have pressed for hikes consecutively in the past several months due to the appreciation of the Canadian dollar. Demand for the grade in China improved with Chinese ivory board mills increasing their operation rates, and buyers had to accept the raises. Overseas mills tried to push up list prices for softwood BCTMP by $2-3/tonne in May after two previous rounds of hikes, each with an increase of $1/tonne, successfully went through. Due to suppliers firmness and the tight market supply, Chinese buyers were forced to accept the raises. In mid-may, several suppliers started a new round of hikes by raising prices by $2/tonne to $44/tonne. Hardwood BCTMP producers also raised list prices by $2/tonne, with levels reaching $46-46/tonne for poplar fiber-based BCTMP and $48-49/tonne for maple fiber-based BCTMP. Figure 23 UMPaper Domestic Imported BCTMP Price Index (RMB/tonne) Figure 24 UMPaper Domestic BCTMP Ex-factory Price Index (RMB/tonne) 4,4 4,2 4, 3,8 3,6 3,4 3,2 3, 2,8 3,8 3,7 3,6 3,5 3,4 3,3 3,2 E. China BCTMP On the spot market, BCTMP was short of supply with demand improving. By late May, the grade was almost out of stock in East China. With contract prices rising quickly, list prices on the spot market also moved up to RMB 3,4-3,5/tonne, yet few transactions were made. 216 RISI, Inc. All rights reserved.

11 May 216 Nonwood Pulp Figure 25 UMPaper Domestic Nonwood Pulp Price Index(RMB/tonne) 5, 4,5 4, 3,5 3, Bagasse Bamboo Reed Bagasse pulp prices dipped in May. The tight supply of bagasse affected the production of bagasse pulp. But the jumbo roll sales of small tissue mills in Guangdong and Guangxi were poor, which also made demand for bagasse pulp very weak. Confronting the slow sales of the grade, bagasse pulp mills cut list prices by RMB 5/tonne in May. Bamboo pulp prices remained flat in May when BHK prices got stabilized. According to bamboo pulp mills, sales of unbleached bamboo pulp were sound. Market demand for tissue furnished with the grade became strong, which directly increased its consumption. Since prices for domestically made unbleached softwood pulp have been much higher, and tissue made with the fiber is not soft enough, unbleached bamboo pulp became a satisfactory replacement. Some bamboo pulp mills have started unbleached bamboo pulp production to meet the market demand. Domestic straw and reed pulp prices were stable. For Liaoning Panjin Zhenxing Ecology Paper, its ex-factory prices remained unchanged at RMB 3,45/tonne for slurry pulp and RMB 3,85/tonne for bale pulp. For Hebei Cangzhou Lingang Zitong Paper, the ex-factory prices for its straw pulp were also unmoved at the April levels. Since the market demand for reed pulp and straw pulp has long been stable, prices for the two grades were also flat. Imports and Exports Figure 26 Monthly BSK Imports 2% 15% 1% 5% % -5% Figure 27 Origins of BSK Imports Other Finland Canada U.S.A Russia BSK Import( tonnes) Year-on-Year change Chile Source: General Administration of Customs of the PRC 216 RISI, Inc. All rights reserved.

12 May 216 In April, BSK imports to China reached 73, tonnes, edging up 1% month-on-month and climbing 8% yearon-year. The value of the imports totaled $412 million, with unit price dropping by $8/tonne from the previous month s level to $587/tonne. Total BSK imports in the first four months grew 11% year-on-year to million tonnes. Major sources of BSK imports were highly concentrated. The top five countries were Canada, Chile, Russia, the USA, and Finland, occupying about 95% of China s total BSK pulp imports. Compared with April 215, BSK imports from Canada, Russia and Finland all increased, and the tonnage from Finland soared 65% year-onyear. Figure 28 Monthly BHK Imports Figure 29 Origins of BHK Imports % 2% 15% 1% 5% % -5% -1% Other U.S.A Chile Uruguay Brazil BHK Import( tonnes) Year-on-Year change Indones Source: General Administration of Customs of the PRC China imported 68, tonnes of BHK in April, dropping 13% month-on-month and down 8% year-on-year. The imports value totaled $317 million, with unit price decreasing sharply by $42/tonne from the March level to $522/tonne. Total BHK imports from January to April slid 1% year-on-year to 2.55 million tonnes. The four biggest sources of BHK imports were Brazil, Indonesia, Uruguay and Chile. These four countries took up a combined share of 92% of the total BHK imports in April. Imports from Indonesia and Uruguay dropped 21% and 15% respectively. The tonnage from USA registered big year-on-year increases in March and April. Figure 3 Monthly USK Imports Figure 31 Monthly BCTMP Imports % 6% 4% 2% % -2% -4% % 3% 25% 2% 15% 1% 5% % -5% -1% -15% USK Import( tonnes) Year-on-Year change BCTMP Import( tonnes) Year-on-Year change Source: General Administration of Customs of the PRC 216 RISI, Inc. All rights reserved.

13 May 216 USK imports to China totaled 52, tonnes in April, falling 4% month-on-month and down 6% year-on-year. The imports were valued at $27.54 million, with the unit price rising by $4/tonne from the March level to $527/tonne. Total USK imports in the first four months this year reached 182, tonnes, down 5% year-onyear. BCTMP shipments from the overseas markets into China totaled 138, tonnes in April, declining 22% monthon-month and falling 11% year-on-year. The total value of BCTMP pulp imports were around $51.29 million. The unit price in April was flat at the March level of $372/tonne. The total BCTMP pulp imports from January to April fell 4% year-on-year to 536, tonnes. Macro Economy and Industry Data 54 Figure32 China Manufacturing PMI Curve(PMI) Figure33 Growth Rate of Industrial Value- added Source:National Bureau of Statistics of China Source:National Bureau of Statistics of China Figure34 Total value of Import and Export Figure35 Asset (Excluding Rural_Households) 3, 2,5 2, 1,5 1, 5 15% 1% 5% % -5% -1% -15% -2% -25% -3% Export/1mill $ Import/1mill $ Export Year-on-Year change Import Year-on-Year change Source:National Bureau of Statistics of China Source:National Bureau of Statistics of China 216 RISI, Inc. All rights reserved.

14 May 216 Figure36 Monthly Record of The Number of Machine-made Paper Board Producers Figure37 Monthly Record of Machine-made Paper and Board and Inventory Amount % -2% -4% -6% 33,, 32,, 31,, 3,, 4% 2% % -2% 236-8% 29,, -4% 234-1% 28,, -6% Number of Enterprises(unit) Year-on-Year change Source:National Bureau of Statistics of China Value of finished product inventory( CNY) Year-on-Year change Source:National Bureau of Statistics of China 216 RISI, Inc. All rights reserved.

15 May 216 China Containerboard Monthly Report I. Global Pulp Shipments and Inventories May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 Global pulp inventories ( tonnes) 3,832 4,55 3,837 3,941 4,187 3,89 3,923 4,274 3,63 3,855 4,368 3,832 days Source:RISI II. Inventories of domestic main ports ( tonnes) Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Qingdao Changshu Baoding III. Scheduled output of domestic pulp ( tonnes) Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 BSK BHK USK BCTMP Bagasse Bamboo Reed Straw Note: The Statistics of output tracked by UMPaper,not cover all domestic pulp capacities. 216 RISI, Inc. All rights reserved. 15

16 May 216 China Containerboard Monthly Report IV. CFR Price Index for Imported Pulp (US dollars/tonne) Grade Area Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 BSKP Russian N.Amer Radiata pine BHKP Eucalyptus Russian MHW UKP Chile BCTMP Softwood Note: UMPaper price selection of Price Index for Import Pulp depends on the contract month. V. Pulp Spot Price Index (RMB/tonne) Grade Area Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 BSKP NE. China 4,7 4,58 4,58 4,6 4,53 4,43 4,43 4,36 4,36 4,23 4,42 4,4 N. China 4,67 4,5 4,6 4,63 4,43 4,43 4,38 4,33 4,32 4,23 4,49 4,43 E. China 4,695 4,63 4,75 4,677 4,544 4,53 4,514 4,528 4,495 4,479 4,566 4,625 BHKP NE. China 4,73 4,8 4,83 4,85 4,7 4,5 4,43 4,38 4,35 4,15 4,23 4,2 N. China 4,7 4,7 4,75 4,75 4,7 4,53 4,5 4,33 4,25 3,98 4, 4,2 E. China 4,613 4,752 4,856 4,853 4,592 4,478 4,4 4,313 4,26 3,938 3,96 3,93 UKP E. China 4,475 4,475 4,575 4,575 4,555 4,49 4,7 4,7 4,65 4,55 4,63 4,7 BCTMP E. China 3,28 3,19 3, 3,5 2,98 2,95 2,95 2,95 2,9 2,88 3,5 3,4 Note: Spot includes resale import pulp and domestic pulp. 216 RISI, Inc. All rights reserved. 16

17 May 216 China Containerboard Monthly Report VI. BSK BHK BCTMP USK Bagasse Bamboo Reed Straw VII. Domestic Pulp Price Index (RMB/tonne) Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 4,9 4,9 5, 5, 5, 5, 5, 5, 4,9 4,8 4,8 4,8 4,68 4,6 4,7 4,7 4,65 4,54 4,42 4,32 4,16 3,95 3,938 3,975 3,442 3,37 3,438 3,413 3,413 3,413 3,413 3,4 3,4 3,4 3,4 3,425 4,15 4,15 4,1 4,1 4, 4, 4, 4, 4, 4, 4, 4,1 3,843 3,843 3,834 3,819 3,821 3,821 3,786 3,74 3,741 3,939 3,939 3,91 4,483 4,45 4,483 4,59 4,565 4,388 4,348 4,32 4,38 4,1 4,1 4,213 3,9 3,8 3,8 3,8 3,8 3,8 3,8 3,8 3,6 3,45 3,45 3,45 2,75 2,75 2,75 2,75 2,75 2,75 2,75 2,75 2,75 2,75 2,75 2,75 Pulp Imports to China ( tonnes) May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 BSK year-on-year change 8% 17% 12% 13% -1% 1% 8% 16% 6% 17% 14% 8% BHK year-on-year change 15% 4% 16% 9% 21% 22% 7% -7% -6% 2% 7% -8% USK year-on-year change -25% 62% 13% 7% 4% 2% % 16% -15% % 3% -6% BCTMP year-on-year change -3% 7% 12% 3% 31% 14% 23% 23% 15% -11% -4% -11% Source:National Bureau of Statistics of China 216 RISI, Inc. All rights reserved. 17

18 May 216 China Containerboard Monthly Report VIII. Schedule of New Pulp Capacities Manufacturer Grade Updates Capacity(1, Remark tonnes) Asia Symbol (Shandong) Pulp & Paper BSK Pulp line #1 shifted to BSK after renovation Shandong Chenming Paper Holdings BHK RISI, Inc. All rights reserved. 18