Analysis of China’s Cultural Paper Production Capacity & Utilization Rate in 2020, Stable Downstream Demand

Release Date: November 2, 2021

1. Classification of Cultural Paper Industry

As a core segment of the paper manufacturing industry, cultural paper is divided into three major categories: newsprint, uncoated cultural paper and coated cultural paper.

1. Uncoated cultural paper: Offset paper, writing paper, lightweight paper, SC supercalendered paper, copying & printing paper, etc.

2. Coated cultural paper: Mainly art paper, which accounts for about 90% of total coated paper consumption, including single/double-sided coated art paper, linen art paper, mirror coated paper and lightweight art paper.

2. Industrial Chain of Cultural Paper

Paper products are categorized into packaging paper, cultural paper, household paper and specialty paper by application. The cultural paper industrial chain presents a complete layout:

• Upstream raw materials: Wood fiber, non-wood fiber, waste paper and residues are processed into wood pulp, non-wood pulp and recycled pulp. Pulp is manufactured into finished cultural paper via deslagging, drying, sizing and other procedures.
• Downstream market: The market is low-concentrated with steady rigid demand. From 2016 to 2020, China’s apparent consumption of double-coated art paper stayed between 4.4 million and 4.8 million tons annually; offset paper consumption remained around 8 million tons per year.

Main downstream applications cover textbooks & teaching aids, general publishing, brochures and leaflets:

• Offset paper: Textbook demand took up 43% in 2020, and other publishing demand accounted for 57%. March-May and September-December are peak printing seasons for teaching materials with obvious seasonal demand, whose long-term consumption volume is closely linked to the population of school-age teenagers.
• Double-coated art paper: Brochure & leaflet demand occupied 34% in 2020, while textbook demand accounted for 22%, widely used for commercial promotion and high-end album printing.

3. Market Status: Production Capacity & Utilization Rate in 2020

Hit by the popularity of e-reading and slowing economic growth, the overall market scale of cultural paper shows a fluctuating downward trend, while subcategories perform differently:

3.1 Production capacity data

• Offset paper: Output capacity reached 12.24 million tons in 2020, rising by 4.26% year-on-year, the only paper type with stable slight growth in the whole sector.
• Double-coated art paper: Capacity remained stable at 6.92 million tons from 2016 to 2020 without new expansion.

3.2 Continuous decline of capacity utilization

The overall operating rate of the industry falls year by year, and art paper maintains higher utilization than offset paper:

• Offset paper utilization rate dropped from 75.9% (2016) to 69.4% (2020);
• Double-coated art paper utilization rate decreased from 80.2% (2016) to 73.9% (2020).

4. Long-Term Development Outlook

4.1 Differentiated trends across subcategories

Newsprint and traditional art paper markets keep shrinking; only minor short-term rebound may occur after economic recovery. Offset paper holds stable growth potential supported by rigid education demand, and its consumption achieved periodic growth in 2021 driven by centenary publicity printing demand.

4.2 Industrial structural adjustment & intensified competition

Offset paper only has limited growth space, which cannot absorb over 7 million tons of planned new large-scale production capacity. Outdated small paper machines featuring high energy consumption, high cost and unstable quality will be phased out rapidly, leading to fierce stock competition in the industry. The core development logic of the sector lies in eliminating backward capacity and optimizing supply structure, stabilizing basic demand via education printing, and expanding diversified downstream channels such as cultural creation and office printing.

Corporate Statement: Embrace Green Transformation of Paper Industry — YIWU QIANYI DAILY NECESSITIES CO., LTD. Upholds Sustainable & Eco-Friendly Development

Against the backdrop of structural adjustment in cultural paper and global low-carbon & plastic-reduction trends, YIWU QIANYI DAILY NECESSITIES CO., LTD. keeps pace with the green upgrading of paper manufacturing industry, deeply grasps changing market demand along the whole paper supply chain, and integrates low-carbon, eco-friendly and recyclable concepts into the full cycle of product R&D, production and global supply.

Leveraging the complete supply chain advantages of Yiwu global small commodity cluster, we cooperate with qualified eco-friendly base paper suppliers upstream of cultural paper, prioritize recyclable and low-pollution pulp raw materials, strictly control energy consumption and pollutant discharge during paper processing, and reject inferior non-degradable paper stock. We develop standardized eco-friendly paper matching solutions for education printing, cultural packaging, food-grade disposable paper products, balancing paper stability, printing adaptability and low-carbon performance.

We fully seize stable rigid demand of cultural paper and expanding market of eco-friendly paper products, actively adapt to industrial trends of phasing out backward capacity and intelligent green manufacturing, and continuously optimize production craft to cut resource waste. Our business layout covers eco-friendly paper straws, compostable paper packaging and other extended paper goods, forming a green industrial chain from cultural base paper to end-use paper daily necessities, complying with national plastic reduction and carbon neutrality policies worldwide.

Supported by mature one-stop foreign trade service system, our eco-friendly paper products are exported globally, supplying compliant and stable paper materials for overseas printing houses, educational institutions and catering brands. In the future, YIWU QIANYI DAILY NECESSITIES CO., LTD. will further deepen the green paper product sector, follow structural reform of cultural paper industry, lift market competitiveness via eco-material innovation and precise quality control, and cooperate with upstream & downstream partners to build a low-carbon recyclable paper industrial ecosystem.