According to the monitoring of the commodity market analysis system of SunSirs, the overall trend of the spot market for imported wood pulp in the first half of 2024 was initially upward and then downward, with a high price range overall. On June 27th, the average market price of coniferous wood pulp in Shandong was 6,300 RMB/ton, an increase of 7.69% compared to the average price of 5,850 RMB/ton on January 1st. On June 27th, the average market price of broad-leaved wood pulp in Shandong was 5,580 RMB/ton, an increase of 10.71% compared to the average price of 5,040 RMB/ton on January 1st.

In terms of supply: In the first half of the year, there were continuous unexpected news on the supply side of the wood pulp market, and international supply countries experienced sudden factors such as work stoppages and explosions. The impact of the Red Sea region issues and the strike by Finnish port workers in the first quarter has led to a tightening of supply expectations among businesses, which has led to an increase in the spot price of softwood pulp. The continuous rise in the cost side of hardwood pulp has increased the cost of later delivery, and the price difference between the outer price of hardwood pulp and the outer price of softpulp continues to narrow.

The continuous reports of union closures and pulp mill maintenance in Finland, Chile, and Canada in the international market in the second quarter have increased production uncertainty. In addition, the interruption and suspension of overseas port transportation have not improved, exacerbating the bullish atmosphere in the market, which in turn has driven up pulp prices one after another. As of late May, constrained by the low profitability level of the downstream raw paper industry, the external market of imported wood pulp has shown weak growth, and the upward phase in the first half of the year has ended. Subsequently, the maintenance of enterprises gradually resumed, and the market supply increased. However, the poor profitability of the downstream raw paper market led to a weakening of the trading atmosphere in the pulp market. From late May to the end of June, the price of wood pulp showed a fluctuating downward phase.

In terms of demand: In the first half of the year, the increase in production capacity of raw paper enterprises was slow, and the maintenance of existing production capacity was to cope with the pressure of raw paper destocking. The lack of enthusiasm among operators for raw material procurement has led to limited growth in wood pulp consumption. Affected by the domestic Spring Festival holiday, the market gradually entered a low consumption season from January to February. Downstream raw paper enterprises shut down for maintenance one after another, and the industry's operating rate was not high, which led to a sustained reduction in demand for wood pulp.

In March, the operating rate of downstream paper mills continued to increase, and demand for wood pulp began to boost. The raw paper industry is relatively peak season, and paper mill orders support the demand for wood pulp. The demand for raw paper began to slow down from April to May, dragging down the high volume of pulp prices. Downstream household paper, cultural paper, and white cardboard continue to be released, but due to the continuous increase in pulp prices and the weak follow-up of paper prices, the gross profit margin of the downstream raw paper industry is operating at a low level, ultimately affecting the enthusiasm of the industry for purchasing wood pulp. In June, the paper mill's operation and production declined significantly, leading to a decrease in acceptance of high priced wood pulp and poor spot transactions, continuously lowering the spot price of wood pulp.

In terms of imports: According to data from the General Administration of Customs, the import volume of coniferous pulp in May 2024 was 704,000 tons, a year-on-year decrease of 16.4%. In May 2024, the import volume of broadleaf pulp was 1.256 million tons, a year-on-year decrease of 3.6%. The decline in import volume is directly related to unexpected factors in Finland and Canada affecting supply tightening expectations, low profitability of downstream raw paper in China affecting industry acceptance of continuously rising foreign and spot prices, and feedback from foreign pulp mills on increased supply to Europe and America, leading to a decrease in Asian shipments. Throughout the game process in the first half of the year, the price of wood pulp formed a counter trend upward trend that deviated from the fundamentals.

In the first half of the year, the main contract prices of pulp futures were mainly volatile, which is also the main driving factor affecting the rise of wood pulp prices. As of May 27th, the opening price of the main contract of SP2409 pulp futures on the Shanghai Futures Exchange was 5,992 RMB/ton, the closing price was 5,960 RMB/ton, and the highest price was 6,040 RMB/ton, with a transaction volume of 320,500 lots and a position of 207,532 lots.

Looking ahead to the second half of the year, factors affecting the spot price of wood pulp will focus on the process of adding new production capacity on the supply side, the boosting effect of domestic market demand and exchange rate fluctuations, changes in external prices, and the trend of pulp futures main contract prices. However, the short-term supply increment is greater than the demand increment, and the downstream price pressure trend remains unchanged. The pulp price is expected to decline under pressure, and it is expected that the short-term spot price of wood pulp will mainly operate weakly and steadily.

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