SunSirs: China Wood Pulp price Showed an Upward Trend and May Fluctuate at a High Level in the Short Term

According to SunSirs: Recently, the spot price of softwood pulp showed an upward trend, while the price of hardwood pulp remained stable. On July 14, the average market price of softwood pulp in Shandong was 6,412.5 RMB/ ton, which was 75 RMB/ ton higher than that in the week early (the average market price of softwood pulp on July 11 was 6,337.5 RMB/ ton), up 1.18%. On July 14, the average market price of hardwood pulp in Shandong Province was 4,875 RMB/ ton, which remained stable compared with that in the week early (the average market price of hardwood pulp on July 11 was 4,875 RMB/ ton).

Through the observation of market changes, the spot price of softwood pulp last week was affected by the rise of pulp futures price at the beginning of the week and followed the upward trend. On July 12, the inter day price of the main contract of SP09 once hit 6,500 RMB/ ton. With the commitment of the Federal Reserve to maintain "strong" monetary policy support, the Central Bank of China cut the reserve requirement ratio more than expected, and China cut the deposit reserve ratio of financial institutions by 0.5 percentage points. Stimulated by these multiple favorable policies, the market showed a significant recovery, which supported the price of the pulp.

Although 13 pulp futures prices high downward adjustment, but the spot market quotation did not appear callback trend. According to the data released by the General Administration of customs, China's pulp import volume in June 2021 was 2.513 million tons, a month on month decrease of 5.91%. The import amount was $1848.8 million, up 0.73% month on month and 43.98% year on year, with an average unit price of $735.69/ ton. Reflecting the supply pressure of pulp, the price decline of downstream finished paper slowed down, which temporarily supported the price of wood pulp.

In terms of futures, on July 14, the opening price of the main contract SP2109 of Shanghai Stock Exchange pulp futures was 6,352 RMB/ ton, and settlement price of the previous day was 6,414 RMB/ ton, with 278,837 transactions and 181,296 positions.

SunSirs wood pulp analysts believe that the current pulp futures price may fluctuate in the range of 6,200-6,500 RMB/ ton for a short time. We need to wait for the future demand to improve, and the price may usher in a breakthrough. It is expected that the short-term wood pulp price may continue to narrow in China.

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