SunSirs: China Wood Pulp Prices are Weak and Falling, with Slight Pressure

https://www.chemnet.com   Jun 11,2024 SunSirs

According to the monitoring of the commodity market analysis system of SunSirs, the prices of softwood pulp and hardwood pulp both declined last week. On June 7th, the average market price of softwood pulp in Shandong was 6,430 RMB/ton, a decrease of 1.08% compared to the average price of 6,500 RMB/ton on June 1st. On June 7th, the average market price of hardwood pulp in Shandong was 5810 RMB/ton, a decrease of 0.89% compared to the average price of 5,862 RMB/ton on June 1st.

By observing market changes, it can be seen that the spot price of wood pulp fell last week. In terms of supply, there have been frequent overseas supply disruptions since the beginning of this year, and pulp mill quotations have continued to rise. In the short term, the overall overseas driving force remains strong. However, the production capacity of coniferous pulp is relatively limited, and the early shutdown of the equipment has led to expectations of a reduction in future supply. The current domestic pulp import volume remains at a relatively high level, but the demand for pulp in Europe has improved, and the destocking cycle is coming to an end.

In terms of demand, downstream paper mills have seen a significant decline in production and production recently. Due to inconsistent trends in pulp and paper production, the overall profit transmission in the industry chain is not smooth. Downstream raw paper enterprises have reduced acceptance of high priced wood pulp, resulting in poor spot transactions, which may limit the potential for pulp price increases in the short term.

In terms of port inventory, as of June 6, 2024, the sample inventory of mainstream pulp ports in China was 1.823 million tons, an increase of 1.2% compared to the previous week. Among them, the inventory of Qingdao Port increased by 7.3% compared to the previous week, while the inventory of Changshu Port decreased by 4.0% compared to the previous week. There has been little change in domestic port inventory. The two major ports experienced mixed fluctuations, with Qingdao Port experiencing slight destocking and Changshu Port continuing to accumulate inventory, resulting in an unsatisfactory overall inventory destocking situation. Continuous high inventory levels continue to put pressure on total port inventory.

In terms of futures, on June 7th, the opening price of the main contract of SP2409 pulp futures on the Shanghai Futures Exchange was 6,082 RMB/ton, the closing price was 6,074 RMB/ton, and the highest price was 6,116 RMB/ton, with a daily increase of 0.07%. The trading volume was 280,300 lots, and the position was 214,465 lots.

SunSirs Wood Pulp Analysts believe that the overall port inventory has remained stable recently, with slight fluctuations, presenting a tight supply-demand balance pattern. And the trend of pulp follows market sentiment, showing a slight decline. In addition, with the seasonal weakening of market demand and insufficient purchasing demand from paper mills, the supply and demand continue to be in a game state, and it is expected that there will be slight pressure on the short-term spot price correction of wood pulp.

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