According to the monitoring of the Commodity Market Analysis System of SunSirs, the prices of coniferous wood pulp and broad-leaved wood pulp have both shown a slight downward trend recently. On August 9th, the average market price of coniferous wood pulp in Shandong Province was 6,100 RMB/ton, a decrease of 0.33% compared to the average price of 6,120 RMB/ton on August 1st. On August 9th, the average market price of broad-leaved wood pulp in Shandong Province was 5,100 RMB/ton, a decrease of 0.97% compared to the average price of 5,150 RMB/ton on August 1st.

In terms of supply: Recently, new production capacity has been added both domestically and internationally, exacerbating the bearish attitude of industry players. In the second half of the year, the pressure for overseas broad-leaved pulp production is gradually increasing. Suzano Cerrado in Brazil announced the official production of 2.55 million tons of broad-leaved pulp, and domestic self-produced pulp will also be put into production. In the short term, this will increase market pulp supply and suppress pulp prices. In addition, the new round of external quotations has opened up a downward channel, weakening the support for pulp prices.

On the demand side: Although the overall performance of downstream operating rates has rebounded, the weak performance of raw paper inventory is still constrained, which has slowed down the consumption rate of wood pulp. In addition, the acceptance of high priced wood pulp is limited, and the purchasing enthusiasm is weak. However, the prices of white cardboard, cultural paper, and household paper are still relatively weak, and the downstream peak season has not yet appeared.

Domestic port data: Recently, the domestic pulp port inventory has stabilized, and the overall inventory is low. As of August 8, 2024, the sample inventory of mainstream pulp ports in China was 1.768 million tons, a decrease of 0.8% from the previous period. After accumulating inventory for several consecutive weeks, the inventory showed a trend of destocking this week.

In terms of futures, the price trend of wood pulp futures on the market is slightly stronger. On August 9th, the opening price of the main contract SP2409 for pulp futures on the Shanghai Futures Exchange was 5,612 RMB/ton, the closing price was 5,716 RMB/ton, and the highest price was 5,734 RMB/ton, with a daily increase of 0.53%. The trading volume was 355,000 lots, and the position was 123,241 lots.

SunSirs's wood pulp analyst believes that August is the time point for the paper industry to transition from off-season to peak season, and there may be a possibility of seasonal increases in wood pulp. However, the current fundamentals lack strong driving force, and the profitability of downstream enterprises has not improved significantly. Downstream paper mills mainly consume raw material inventory in the early stage, and the supply-demand game situation remains unchanged, which continues to drag down the enthusiasm of industry players for raw material procurement. It is expected that the short-term spot price of wood pulp may continue to operate weakly and steadily.

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