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SunSirs: China Wood Pulp Price Rose in February, with Short-term Strong Fluctuations
March 01 2024 15:11:16SunSirs(Selena)

According to the monitoring of the commodity market analysis system of SunSirs, the prices of softwood pulp and hardwood pulp showed an upward trend in February. On February 29th, the average market price of softwood pulp in Shandong was 5,984 RMB/ton, an increase of 2.99% compared to the average price of 5,810 RMB/ton on February 1st. On February 29th, the average market price of broad-leaved wood pulp in Shandong was 5,290 RMB/ton, an increase of 3.77% compared to the average price of 5,098 RMB/ton on February 1st.

By observing market changes, it can be seen that in early February, the spot prices of softwood pulp and broad-leaved wood pulp showed a reverse trend, while the futures prices of pulp remained fluctuating and consolidating within the range. In terms of supply, the sample inventory of mainstream ports in China is showing a trend of destocking. Due to the impact of the Spring Festival holiday, the trading volume in the pulp market is gradually slowing down, and the supply is relatively sufficient, which has affected the decline in spot prices of softwood pulp. The price break before the holiday is mostly related to the weakening of the buying power of the fundamentals before the holiday.

In terms of demand, some downstream raw paper manufacturers continue to have a light and rigid demand, while some paper mills plan to undergo maintenance during the Spring Festival period, and the procurement of pulp is coming to an end, providing limited support for the trend of pulp prices. In addition, logistics transportation has gradually decreased, and the trading volume in the pulp market has gradually slowed down. But the downward performance of prices has a negative impact on the market's trading mentality.

After the Spring Festival holiday in late February, the spot price of wood pulp continued to rise, and the main contract of pulp futures showed strong and volatile trading. The market's spot prices rose year-on-year. In terms of supply, domestic coniferous pulp still relies entirely on imports, and the global pulp inventory continues to decrease. The volume of pulp shipped from major producing countries to China has begun to decrease, and the pressure on domestic imports has been somewhat alleviated.

As of February 29th, the sample inventory of mainstream pulp ports in China was 2.128 million tons, a decrease of 0.8% from the previous period. After accumulating inventory for two consecutive weeks, the inventory has turned to a trend of destocking. In addition, the increase in external quotations for wood pulp at the end of the month has also provided some support for domestic wood pulp prices.

In terms of demand, due to the relatively average procurement situation of wood pulp in the pre holiday market, some downstream manufacturers have a medium low level of raw material inventory, and there is gradually a replenishment situation after the holiday. In addition, the pulp industry chain is experiencing seasonal changes, and downstream production time is relatively concentrated. The peak season for producing finished paper is gradually approaching. After the holiday, some large factories have issued price increase letters for white cardboard and household base paper, which has provided some confidence support to the market. The negative factors on the demand side in the past are gradually disappearing. As the end of the month approaches, the operating load rate of downstream paper mills has increased, pulp procurement inquiries have increased, and the trading atmosphere in the pulp market continues to rebound.

In terms of futures, after the Spring Festival holiday, the price of pulp futures remained relatively strong. On February 29th, the main contract of SP2405 pulp futures on the Shanghai Futures Exchange opened at 5,868 RMB/ton, closed at 5,884 RMB/ton, and the highest price was 5,894 RMB/ton, with a daily increase of 0.27%. The transaction volume was 281,600, and the position was 198,851.

SunSirs Wood Pulp Analysts believe that the current mainstream domestic port inventory has returned to a destocking state, and the market is still in a post holiday recovery period. The stocking of various links may easily lead to a slight increase in paper prices. Therefore, the industrial chain structure of paper also supports the expectation of a slight increase in the price of wood pulp in the future, and it is expected that the spot price of wood pulp may remain strong and volatile in the short term.


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