The Office of the Hunan Provincial Government issued the “Three-Year Action Plan for the Special Renovation of the Ecological Environment of the Dongting Lake (2018-2020)†in the near future, highlighting the promotion of the ten key areas of the Dongting Lake eco-environment and the nine key areas. Before the end of 2018, the area will be eliminated. The backward production capacity of the paper industry, including chemical pulp production line of 51,000 tons/year, single pulp production capacity of 50,000 tons/year (excluding 50,000 tons) non-wood pulp production line.
The performance of local governments is linked to environmental protection. Environmental weighting is far more than GDP. Local environmental protection policies have become stricter. Under the environment of local government evaluation and reform, environmental quality has been unsustainable due to the mere pursuit of economic growth, and the trend of environmental protection attitudes by local governments has changed. In 2018, the Central Economic Work Conference for the first time included ecological civilization in its priority work, attaching importance to unprecedented levels of improvement, and environmental protection entering the era of long-term supervision. Changes in the assessment methods of local governments have led local environmental protection policies to be strengthened.
The sewage discharge permit system and environmental protection tax implementation have been implemented to improve the efficiency of local government environmental management. The sewage discharge refinement control system has been preliminarily established with the sewage permit as the core. “One-signal management†strengthens the post-event monitoring of environmental protection and acts as an environmental protection penalty. in accordance with. The "Environmental Protection Tax Law" has been implemented since January 1, 2018. After fees and tax changes, penalties have been more stringent. Compared with sewage charges, the implementation of environmental taxes has fully mobilized local enthusiasm, solved the problem of lack of law enforcement rigidity in the collection process of sewage charges, and improved the efficiency of local environmental protection supervision.
The newly added capacity will be dominated by leading paper companies, and production capacity will be eliminated from the supply and demand side to consolidate the leading profitability. We believe that there is no net increase in production capacity under the constraints of environmental protection, energy consumption and other rigid indicators, and local governments are more inclined to unload the indicator to large paper manufacturers. The slight improvement in the profitability of small businesses will not be able to withstand the pressure of huge financing costs. Dachang is expected to purchase or merge smaller plants or extrude it to increase market share, and to expand upstream from upstream processing enterprises to upstream resource-based companies. The ability to resist risks has been significantly enhanced. Leading paper companies have improved their profitability, and they are optimistic about the industry leading Sun Paper, Chenming Paper and Shanying Paper.
The risk suggests that the relaxation of environmental protection policies has led to the resumption of production of small capacity. The new supply capacity of the industry supply side exceeded the expected release.
The over-expected decline in paper prices caused a decrease in the profit per ton of paper, and the progress of new paper production capacity by paper companies was hindered.
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