According to the monitoring of the commodity market analysis system of SunSirs, the spot market prices of softwood pulp and hardwood pulp showed a contradictory trend in August. On August 30th, the average market price of softwood pulp in Shandong Province was 6,250 RMB/ton, an increase of 2.12% compared to the average price of 6,120 RMB/ton on August 1st. On August 30th, the average market price of hardwood pulp in Shandong Province was 4,900 RMB/ton, a decrease of 4.85% compared to the average price of 5,150 RMB/ton on August 1st.
On the supply side: The supply of softwood pulp in the market was relatively stable in August, and spot prices were slightly lowered in the early stage due to the decline in futures prices. In the latter half of the year, there were factory and port strikes in Canada and India, which had an impact on the short-term supply chain and stimulated market sentiment, leading to a continued downward trend in the supply of pulp imports. Therefore, the supply side news support attribute was strong, resulting in an increase in the price of softwood pulp.
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 for 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 hardwood pulp.
On the demand side: August marks the turning point from the traditional off-season to the peak season in the paper industry. Although downstream operating rates have rebounded overall, 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.
The prices of downstream white cardboard, cultural paper, and household paper are still relatively weak, and the raw paper market generally focuses on reducing inventory and shipping, with weak willingness to replenish inventory. However, the release of orders for the Mid Autumn Festival in the market is limited, and the overall terminal demand is not strong. In addition, due to the maintenance or conversion of raw paper enterprises to other types of paper, the unexpected production of new capacity, and industry restrictions to maintain prices, the total consumption of wood pulp has decreased, which in turn has a certain negative impact on the trend of pulp prices.
In terms of imports: According to data from the General Administration of Customs, the import volume of pulp in July 2024 was 2.325 million tons, with a month on month decrease of -10.8% and a year-on-year decrease of -14.6%. The cumulative import volume from January to July 2024 was 2,015.6 million tons, with a cumulative year-on-year decrease of -0.6%. Among them, the import quantity of coniferous pulp in July was 551,000 tons, with a month on month increase of 0.2% and a year-on-year increase of 24.3%.
Domestic port data: As of August 29, 2024, the sample inventory of mainstream pulp ports in China was 1.849 million tons, an increase of 3.5% from the previous period, and the inventory continued to accumulate for three weeks. Among them, the inventory of Qingdao Port was 1.148 million tons, an increase of 1.9% compared to the previous period; The inventory of Changshu Port was 565,000 tons, an increase of 10.4% compared to the previous period.
In terms of futures, the price of pulp futures in August showed a trend of first decreasing and then increasing. As of July 30th, the opening price of the main contract sp2501 pulp futures on the Shanghai Futures Exchange was 6,036 RMB/ton, the closing price was 6,038 RMB/ton, the highest price was 6,060 RMB/ton, the transaction volume was 218,300 lots, and the position was 189,107 lots.
The wood pulp analyst from SunSirs believes that the current disturbance in the overseas pulp market has led to an upward trend in pulp futures prices, followed by an increase in domestic needle pulp spot prices, but the market transaction situation is generally average. The production pressure and weak demand for broad-leaved pulp will not completely subside in the short term. Supported by the expected peak season of the Golden September and Silver October, the pulp market has shown a strong short-term trend, with futures and spot prices following suit. It is expected that the short-term pulp spot prices will continue to fluctuate widely.
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