SunSirs: China Wood Pulp Prices Fluctuated in November, Maintaining a Range of Fluctuations in the Short Term

According to the monitoring of the Commodity Market Analysis System of SunSirs, the price of softwood pulp first rose and then fell in November, while the price of hardwood pulp continued to decline weakly. On November 29th, the average market price of softwood pulp in Shandong Province was 6,260 RMB/ton, an increase of 0.32% compared to the average price on November 1st. On November 29th, the average market price of hardwood pulp in Shandong Province was 4,542 RMB/ton, a decrease of 2.11% compared to the average price on November 1st.

On the supply side: Due to the continued accumulation of inventory in European ports on a month on month basis and the large-scale production of wood pulp in China in the second half of the year, the overall market supply pressure is relatively high. Subsequently, there was positive news in the market that Canadian port strikes and pulp mills were slowing down shipments, leading to an expected increase in import volume in the market. However, due to disruptions in overseas supply, the price of softwood pulp remains firm in US dollars, resulting in a widening price difference between different types of pulp.

Under the background of high production of hardwood pulp, the weakness has not eased. Against the backdrop of a large price difference between softwood and hardwood pulp, it has had a restraining effect on the rise in softwood prices. In addition, the high price transactions in the pulp market are limited, and the price of imported hardwood pulp is under pressure and declining, showing a super seasonal downward trend.

On the demand side: In mid to early November, the profitability of domestic downstream enterprises remained sluggish, with downstream paper mills mainly consuming pre production raw material inventory. The game situation between supply and demand remained unchanged. Although there have been frequent price increase letters from paper mills, the increase in paper prices has not been smooth. Downstream paper mills' shipments have not been smooth, resulting in a decrease in raw material procurement volume, mainly through inquiries, with a low transaction ratio.

In late November, downstream paper production remained low, and the market's wait-and-see sentiment was dominant. Various types of raw paper mainly maintained stability during the week, with limited support for pulp prices in the future. Subsequently, the shutdown of Chenming Paper Industry led to an increase in the price of white card paper, followed by a price increase letter from the Cultural Paper Factory, which boosted the price of wood pulp. However, there has been no real improvement in actual demand, and the increase in paper prices is actually a way to stop losses under cost pressure. As the end of the month approaches, wood pulp prices have fallen and declined.

In terms of imports: According to data from the General Administration of Customs, the import volume of pulp in China in October 2024 was 2.673 million tons, with a month on month decrease of -0.1% and a year-on-year decrease of -12.5%. The cumulative import volume for the whole year was 28.31 million tons, with a cumulative year-on-year decrease of -5.3%. The import volume of Chinese pulp in October still showed a year-on-year and month on month decline.

Domestic port data: As of November 28, 2024, the sample inventory of mainstream pulp ports in China was 1.711 million tons, a decrease of 3.6% from the previous period, and the inventory has turned into a trend of destocking in this cycle. Among them, the inventory of Qingdao Port was 1.05 million tons, a decrease of 0.9% compared to the previous period; The inventory at Changshu Port was 458,000 tons, a decrease of 11.9% compared to the previous period.

In terms of futures, the main contract prices of pulp futures continue to fluctuate and tend to rise. As of November 29th, the opening price of the main contract sp2501 for pulp futures on the Shanghai Futures Exchange was 5,822 RMB/ton, the closing price was 5,844 RMB/ton, and the highest price was 5,876 RMB/ton, with 170,300 transactions and 103,068 positions held.

The wood pulp analyst from SunSirs believes that downstream paper mills are actively issuing price increase letters to improve the profitability of raw paper. However, due to limited implementation, the gross profit margin of the downstream raw paper industry continues to fluctuate at a low level, and paper companies mainly purchase raw materials for immediate needs. The high price transactions in the pulp market are not smooth, and both buyers and sellers have a strong wait-and-see attitude. It is expected that the spot price of wood pulp will maintain a range of fluctuations and consolidation in the short term.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.