Considering alternative channels, the actual reduction in waste paper fiber is 23.06 million tons. The substitution effect comes from three aspects: directly imported packaging paper, waste pulp, and domestic waste usage: from 2018 to 2019, imported packaging paper is expected to accumulate an increase of 2.05 million tons compared to 2017, corresponding to approximately 2.25 million tons of waste paper; It is expected that the accumulated amount of waste pulp will increase by 1.36 million tons compared to 2017, corresponding to approximately 1.63 million tons of waste paper; The usage of national waste is expected to decrease by 3.53 million tons compared to 2017. The actual decrease in fiber content of waste paper is 2306=a decrease in imported waste paper by 2341- substitution of imported packaging paper by 225- substitution of imported waste pulp by 163+a decrease in the use of domestic waste by 353. The shortage of waste paper from 2018 to 2019 did not show up due to the decrease in inventory in the industrial chain and the consumption of this portion of fiber.

       Although the growth rate of social zero value and exports declined from 2018 to 2019, they still maintained positive growth. Therefore, we cautiously assume that there was no increase in terminal demand from 2018 to 2019, so the decrease in waste paper fibers can only be explained as a decrease in inventory in the industrial chain. The decrease in fiber content of waste paper from 2018 to 2019 corresponds to 21 million tons of packaging finished paper. According to the six inventory links of the entire industry chain, namely packaging factory waste paper, paper factory waste paper, paper factory raw paper, distributor and trader raw paper, secondary factory raw paper, and tertiary factory cardboard, the average inventory of each link decreased by 3.5 million tons, corresponding to approximately 20 days of inventory.

       Losing inventory buffer, the contradiction between raw material supply and demand will become apparent in the next six months. By calculation, it is expected that the shortage of waste paper will be close to 20 million tons in 20 years. Considering that the four listed companies in the waste paper series may concentrate their overseas waste pulp production capacity of 2.5 million tons on imports next year, there will also be a shortage of around 17.5 million tons of waste paper fiber supply in 20 years. Based on our grassroots research conducted at the end of August 2019, we visited relevant links in the waste paper industry chain in some regions of central, eastern, and southern China. We believe that the overall space for the continued depletion of waste paper fiber inventory in the industry chain is already quite limited. Starting from 20 years, there will be no further inventory reduction buffer in the industrial chain, and the actual supply-demand contradiction will become apparent. The price increase of waste paper series will become a highly probable event.

       After the gap becomes apparent, the biggest short-term impact will be the price increase of waste paper series. The insufficient supply of domestic waste paper fibers will lead to an increase in the price of domestic waste and drive up the price of finished paper, which will benefit enterprises that have a small portion of foreign waste quotas and have already laid out waste pulp and other raw materials overseas in advance. As prices rise, there will be other channels to make up for deficiencies: 1) transporting waste paper from remote western regions to the Central Plains; 2) The volume of imported finished paper has increased; 3) The rise in waste paper prices, which have been maintained for a long time, has led to adjustments in the raw material structure of the box and tile paper production line, increased wood pulp fiber ratio, and forced the upgrading of box and tile paper packaging products.

       In the medium to long term, the supply and demand structure of the industry is passively optimized. Due to the lack of payment terms at the packaging station and the tendency to cooperate with financially stable large paper mills, there is a shortage of domestic waste paper fiber supply, which will lead to domestic waste paper being prioritized for supply to large paper mills. Due to a shortage of raw materials, a large number of small and medium-sized paper mills in China may experience a long-term low operating rate, resulting in a significant decrease in actual output capacity and passive optimization of the industry landscape.

       The import volume of waste paper from 2018 to 2019 is expected to decrease by 22.41 million tons compared to 2017. The import volume of waste paper in 2017/2018 was 257.2/17.03 million tons respectively, and it is expected that the import volume of waste paper in 2019 will be 11 million tons. The import of waste paper did not show a significant decline in 2017, indicating that the domestic fiber supply was still sufficient in 2017. Therefore, based on 2017, the import volume of waste paper in 2018/2019 decreased by 8.69/14.72 million tons respectively compared to 2017, reaching a total of 23.41 million tons, corresponding to a decrease of 21.28 million tons in the output of packaging paper.

       Affected by national policies, the import volume of waste paper has gradually decreased in the past two years, and waste paper imports may be completely banned after 2020. In this situation, importing waste pulp has become one of the supplementary options for fiber sources in some domestic paper mills. However, currently there is a lack of executable unified standards for the quality inspection of waste pulp, which to some extent hinders the circulation and development of this emerging commodity. Many related enterprises and market professionals are very concerned about the issue of customs clearance and inspection of imported waste pulp.

       The 8th Fastmarkets RISI International Paper and Box Corrugated Paper Conference will be held from October 23 to 25, 2019 at the Hyatt Xi'an, marking the eighth consecutive year that RISI has hosted this brand conference.

        This year, we will continue to explore policy changes, technological innovation, and opportunities and challenges faced by the industry based on market trends. The agenda of the 2019 conference includes the following points:

       How to cope with the economic slowdown and the impact of waste paper import policies on the paper industry in the context of changes in the national waste recycling industry and the inspection, quarantine and identification of imported waste paper and recycled pulp commodities: A paper mill perspective

       The impact of waste paper recycling on the environment and sustainable development, Review and Outlook of China's Recycled Fiber Market and Demand Analysis Southeast Asian Market Consumption Potential Analysis of India's Waste Paper Market Potential Analysis of China's Packaging Paper Industry Development Potential Analysis of Asian Box Board Corrugated Paper Production Competitiveness Roundtable Discussion: Opportunities and Challenges - Responding to Economic Slowing and Changes in Raw Material Supply Structure Roundtable Forum: How to Rebalance the Global Waste Paper Market Roundtable Discussion: Opportunities and Challenges of China's Packaging Paper Market