SunSirs: China Wood Pulp Prices are Weak and Declining, with Short-term Weak Fluctuations

https://www.chemnet.com   Aug 19,2024 SunSirs

According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of softwood pulp slightly decreased last week, while the price of hardwood pulp decreased significantly. On August 16th, the average market price of softwood pulp in Shandong Province was 6,090 RMB/ton, a decrease of 0.16% compared to the average price of 6,100 RMB/ton on August 11th. On August 16th, the average market price of hardwood pulp in Shandong Province was 5,030 RMB/ton, a decrease of 1.37% compared to the average price of 5,100 RMB/ton on August 11th.

On the supply side: Last week, the supply of softwood pulp in the market was relatively stable, and spot prices slightly declined. The supply of hardwood pulp is expected to increase due to the initial release of new domestic production capacity into the market. In addition, the Suzano Cerado project, which started production in July overseas, has an annual production capacity of 2.55 million tons of eucalyptus pulp. In September, there are expectations of the release of new production capacity of Beihai Jiulong white cardboard and supporting broad-leaved pulp and chemical pulp in China, which has increased the pressure on the supply side of the pulp market.

In terms of demand, the traditional peak season orders for the downstream paper industry in August were limited, and the profit level of the downstream raw paper market industry did not improve significantly, resulting in insufficient enthusiasm for wood pulp procurement. The raw paper market generally focuses on reducing inventory and shipping, with a weak willingness to replenish inventory; The release of white cardboard orders for the Mid Autumn Festival is limited, and the overall terminal demand is not strong, which restricts the enthusiasm of downstream customers to take delivery of goods. The demand is not strong in driving the market, resulting in blocked transactions of high priced wood pulp.

Domestic port data: Last week, the inventory of mainstream ports in China returned from destocking to accumulation. As of August 15, 2024, the sample inventory of mainstream pulp ports in China was 1.771 million tons, an increase of 0.2% from the previous period. The inventory showed a trend of accumulation this week.

In terms of futures, the price of wood pulp futures has decreased more than increased. On August 16th, the opening price of the main contract SP2409 for pulp futures on the Shanghai Futures Exchange was 5,650 RMB/ton, the closing price was 5,658 RMB/ton, and the highest price was 5,690 RMB/ton, with a daily increase of 0.64%. The trading volume was 139,000 lots, and the position was 91,357 lots.

The wood pulp analyst from SunSirs believes that the current wood pulp market is in a state of strong supply and weak demand. Downstream paper mills are actively issuing price increase letters to improve the profitability of raw paper. However, due to limited implementation, the price increase in the downstream raw paper market is weak, and paper companies are maintaining their demand for essential purchases. It is expected that the short-term spot price of wood pulp will continue to fluctuate weakly.

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