China’s paper industry underwent more challenges in 2018. Initial reports from China Paper Association (CPA) showed paper and board production in the first 9 months of the year shrank 5.93 million metric tons, or -7.3%, from the same period of 2017. This lowered CPA’s full year forecast to 103 million metric tons in production, -7.5% and 103.8 million metric tons in consumption, -4.7% from the previous year.

Slow-down in China’s economic growth also created negative pressure on industry sales and earnings. From January to September, the industry’s core business revenue fell -10.1% from that of 2017 to RMB1,057.8 billion (US$154.4 billion). Much of the decrease came from the paper and board sector, which reduced RMB78.4 billion (US$11.45 billion), or -11.0%, regardless of the +23.6% rise of RMB12.3 billion (US$1.80 billion) in the pulp sector. Total industry earnings went down RMB14.8 billion (US$2.16 billion), -20.0% as the loss in paper and board sector totaled RMB10.8 billion (US$1.58 billion), or -22.6% from the same period of 2017. Inactiveness in market demand, beginning from the 3rd Quarter of the year resulted in +41.0% increases, or RMB12.0 billion (US$1.75 billion), in inventories of paper and board by end-September 2018, according to CPA.