SunSirs: China Wood Pulp Prices Continue to Fluctuate and Maintain Short-term Range Consolidation

According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of softwood pulp has steadily increased this week, while the price of hardwood pulp has continued to weaken. On November 22, the average market price of softwood pulp in Shandong Province was 6,300 RMB/ton, an increase of 0.74% compared to the average price on November 17. On November 22, the average market price of hardwood pulp in Shandong Province was 4,542 RMB/ton, a decrease of 1.05% compared to the average price on November 17.

On the supply side: The recent depreciation of the Chinese RMB has provided positive support for the increase in import costs, but in addition to the positive information on the import cost of needle pulp, the changes in the industrial chain are mostly bearish, and the international shipment volume has increased seasonally compared to the previous period. Under the background of high production of broad-leaved trees, the weakness has not eased. Against the backdrop of a large price difference between coniferous and broad-leaved pulp, it has had a restraining effect on the rise in coniferous prices. During the week, Arauco in Chile reported flat offers for Silver Star and Star in November.

On the demand side: Currently, downstream paper production remains at a low level, with a dominant wait-and-see sentiment in the market. Various types of raw paper are expected to maintain stability within the week, with limited support for pulp prices in the future. There is currently no significant increase in orders in the cultural paper market; The production of household paper market is relatively stable, and downstream processing plants purchase according to demand; There are maintenance issues in the packaging paper market among enterprises, and the mentality of raising prices has not decreased. With the weakening of pulp demand in Europe, domestic performance has also been affected, making it difficult for product valuations to continue to increase.

Domestic port data: Domestic ports showed a trend of accumulating inventory during the week, with Qingdao Port experiencing a narrow range of inventory depletion and a slower shipping speed. However, the proportion of broad-leaved pulp in the port is relatively high. As of November 21, 2024, the sample inventory of mainstream pulp ports in China was 1.775 million tons, an increase of 2.1% compared to the previous period. Among them, the inventory of Qingdao Port was 1.06 million tons, a decrease of 1.7% compared to the previous period; The inventory of Changshu Port is 520000 tons, an increase of 12.6% compared to the previous period.

In terms of futures, pulp futures prices have been running relatively strong this week. As of November 22, the opening price and closing price of the main contract sp2501 for pulp futures on the Shanghai Futures Exchange were 5,966 RMB/ton and 5,922 RMB/ton, respectively. The highest price was 5,968 RMB/ton, with a daily increase of 0.03%. The trading volume was 216,200 lots, and the position held was 150,726 lots.

The wood pulp analyst at SunSirs believes that the current increase in softwood pulp prices is influenced by favorable factors such as cost support and expectations of reduced production and tightened supply. However, it is still playing against negative factors such as narrow accumulation of port inventory and poor transmission of industrial chain profits, and it is expected that the short-term spot price of wood pulp will maintain a range consolidation.

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