BEIJING , Oct. 25, 2013 (Viewpoint) -
Recently, China's Ministry of Industry and Information Technology (MIIT) released a second version of its outdated pulp and paper capacity closure campaign for 2013, raising this year's removal target to 7.42 million tonnes (the first list totaled 6.21 million tonnes). The total industry target is less than last year's record figure of 9.95 million tonnes. Two lists with firm level capacity removal details were also released, covering more than 300 firms in this industry. Additionally, unlike prior years, some provinces disclosed further machine and grade details on listed firms. Since the MIIT began to provide firm details a few years ago, we have run a full diagnosis on the annual list and targeted firms in order to gauge the closure scale and complete the supply side of our forecast. Based on the information available to us, we estimate that the planned closure targets for containerboard and boxboard capacity amounted to 3.0-3.3 million tonnes and 1.0-1.4 million tonnes, respectively. On average, these two grades represent 57% of the total pulp and paper closure targets this year. In terms of geographical location, the top four provinces, Hebei, Fujian, Hunan and Anhui, comprise 51% of the containerboard capacity closure target, while Hunan and Hebei also account for 49% of the boxboard capacity removal goal.
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