By 2015, global wood pulp prices exceed the peak of 2011, which is very detrimental to manufacturers of wood pulp as raw materials, especially packaging paper manufacturers, their production costs are increasing. According to IBIS World, wood pulp prices are expected to grow at an average annual rate of 5.1% in the three years to 2019 and will be passed on to paper producers downstream, with paper prices expected to grow at an average annual rate of 3.2% Rose, and ultimately passed to buyers of paper.

The continued development of electricity providers, the continued growth of spending power, strengthening industrial production and government spending and other factors, will expand the demand for packaged products.

First, the higher spending power

A number of factors contributed to the growth in consumer spending. First, IBIS World predicts that by the end of 2019, the US unemployment rate will remain at the pre-crisis level. Improved economic conditions will encourage the creation of more enterprises, as well as existing enterprises to increase the number of employees and create more employment opportunities. The second is expected in the next three years, consumer confidence (measured by the consumer confidence index) will be an average annual rate of 3.2% increase in consumer spending will be an average annual growth rate of 3.3%. Third, the next three years the US population will grow at an average annual rate of 0.8%.

The growth of consumer spending, will lead to the growth of commodity demand, and these goods in the transport process, often need to use wrapping paper.

Second, the sustainable development of e-commerce

As consumers are more willing to use the money for faster online services, so the number of Internet users and e-commerce is growing, the next three years, computer Internet users will be an average annual growth rate of 3.9%, mobile Internet users will be years Are 5.0% growth rate. E-commerce sales will grow at an average annual rate of 2.6%. By 2019, e-commerce sales will account for 10.6% of all retail sales. Thereby driving the growth of demand for a wide range of packaging products, including paper-based packaging products, required for e-commerce.

Third, strengthen industrial production and commercial activities

According to the index of industrial production measured by the mining, manufacturing and electrical sectors, industrial production is expected to grow by an average annual rate of 2.4% by 2019, with an average annual growth rate of 0.8%. An average annual growth rate of 2.5%. Growing industrial activity will drive the growth of demand for wrapping paper, since paper packaging is widely used for the transportation of goods of all kinds, which is essential for the production and distribution of goods.

Fourth, government spending increased

Sustained economic growth, government spending will also increase, which will help packaging product demand growth.

Fifth, the paper packaging supplier's favorable position

The growth in demand for paper packaging has enabled paper packaging suppliers to protect their own by increasing the cost of wood pulp by shifting prices to buyers to increase paper prices.

In addition, according to IBIS World, pulp producers are negotiating with sellers to choose the right pulp suppliers from the standpoint of reducing product quality risks and controlling the necessary R & D costs, as there is little variation in wood pulp on the market When there is a certain chip. If necessary, buyers can easily replace the wood pulp suppliers. Buyers get bargaining chips with lower conversion costs because they can easily find a more valuable supplier and are in a strong position to negotiate with current suppliers.

Although wood pulp prices are expected to record highs in the next few years, they are not all bad news. Relying heavily on demand for packaged products and reliable bargaining chips, wrapping paper producers are able to keep their profit margins in a strong position.