According to the monitoring of the commodity market analysis system of SunSirs, the price of softwood pulp fluctuated last week, while the price of hardwood pulp slightly declined. On July 19th, the average market price of softwood pulp in Shandong Province was 6,160 RMB/ton, which remained stable compared to the average price on July 14th. On July 19th, the average market price of hardwood pulp in Shandong Province was 5,196 RMB/ton, a decrease of 0.46% compared to the average price of 5,220 RMB/ton on July 14th.
Supply side: Due to sudden market disruptions and the diversion of demand from the US and Europe, there may be downward expectations for pulp imports. The overseas quotation is relatively firm due to the rebound in demand from the United States and Europe, supported by the logic of import volume decline and price increase. In addition, the pressure of overseas broad-leaved pulp production is gradually increasing in the second half of the year, and domestically produced pulp will also be put into production in a concentrated manner, which will increase the market supply of pulp in the short term and exert certain pressure on pulp prices.
On the demand side: As expectations of the Federal Reserve's interest rate cuts continue to weaken, the strength of demand recovery in the second half of the year may not be as strong as expected. Downstream raw paper enterprises have reduced their acceptance of high priced wood pulp, resulting in poor spot transactions and a drag on pulp consumption. Under the pressure of the off-season, the price of wood pulp is weak.
Domestic port data: Market operators have low enthusiasm for purchasing and hoarding goods, with a focus on immediate needs and slow consumption of pulp. As of July 18, 2024, the sample inventory of mainstream pulp ports in China was 1.768 million tons, an increase of 7.8% from the previous period, and the inventory continued to accumulate this week.
In terms of futures, the price trend of wood pulp futures continues to be weak at first and then rising. On July 19th, the opening price of the main contract sp2409 for pulp futures on the Shanghai Futures Exchange was 5,750 RMB/ton, the closing price was 5,752 RMB/ton, and the highest price was 5,776 RMB/ton, with a daily increase of 1.37%. The trading volume was 301,200 lots, and the position was 217,381 lots.
The wood pulp analyst from SunSirs believes that due to the unchanged prices of some foreign pulp in July, high import costs, and a deep inversion in the domestic market, the support of the low-level center of gravity is strengthening. In addition, the inventory of domestic pulp ports has increased significantly month on month, and downstream demand has not improved significantly. It is expected that the short-term spot price of wood pulp will remain in a range of fluctuations.
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