External Environment May be Challenging For Paper Industry
Recently, the State Council published the Notice On Further Simplifying The Authentication Process And Steadily Promoting Work And Production Resumption, including five measures to provide more convenient procedures for enterprises during the resumption process. As of March 11, most pulp and paper producers across China have resumed normal production because of the increasing feedstock supply. It is worth noting that the city of Xiaogan in Hubei province published a resumption schedules of 33 enterprises, including major paper producers Vinda, Gold Hongye (a subsidiary of Sinar Mas APP), C&S and Golden Phoenix.
External environment may be challenging
In the past few days, the U.S. stock market has seen the largest decline since 1987. With the escalating public health situation in the U.S., more travels, conferences and major events will be delayed or canceled, and the consumption in the U.S. market will be affected.
Italy amongst all European countries suffers the most severe public health situation, and it also has a higher debt ratio. If the Italian economy suffers great losses, the European economy will be dragged down. Under such circumstances, the pandemic may worsen the current economic dilemma in Europe.
According to the Cabinet Office of Japan, the country's GDP for the October-to-December period in 2019 has been revised downward to an annualized contraction of 7.1 percent in real terms, and it is the largest decline since April-to-June 2014. Japan will face growing economic pressure as the outbreak has damaged the local industry supply chain and tourism.
In conclusion, the panic sentiment is building up because of the intensifying public health situation worldwide as well as the plummeting oil price, and overseas markets will experience more severe economic setbacks in the short term. Under the context of economic globalization, the bond between countries is tighter than ever before. The global industry chains may be subject to a great impact as the pandemic escalates. On one hand, the wide-spread outbreak will limit the activities of residents in many countries. On the other hand, the damaged industrial chain may lead to more companies being shut down, affecting the employment rate and residents’ income. As the world’s largest trading power, the decline in global demand will certainly affect China’s export, and the pulp and paper industry is of no exception.
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