In Q4 2025, sustained price hikes in the overseas hardwood pulp market drove up spot prices for imported wood pulp. However, limited actual supply-demand improvements capped the upward momentum. Looking ahead to Q1 2026, cost pressures and slowing supply growth may support firmer pulp prices before the Spring Festival. Post-holiday, declining demand and weak base paper profitability could weigh on prices, potentially leading to a peak followed by fluctuating declines.

Strong Cost Support: Imported Pulp Prices Primarily Trended Upward with Volatility in Q4 2025

China's imported pulp spot market overall showed an upward trend with volatility in Q4 2025, with hardwood pulp experiencing significant gains. The primary driver was cost pressure: from August to October, continuous price hikes in the hardwood pulp export market pushed up arrival costs, driving spot prices higher. However, actual supply-demand improvements in the pulp market remain limited: Slow profit recovery in the downstream paper industry has constrained paper mills' willingness to absorb higher pulp costs. Concurrently, new pulp capacity continues to come online, easing supply constraints. These factors collectively cap pulp price upside, particularly as softwood, unbleached, and chemical mechanical pulp prices show limited gains or sideways consolidation, resulting in significantly smaller increases compared to hardwood pulp.

As of December 31, 2025, the daily average price for imported hardwood pulp stood at 4,627.63 RMB/ton, up 385.26 RMB/ton (9.08%) from September 30. The daily average price for imported softwood pulp reached 5,577.32 RMB/ton, rising 37.86 RMB/ton (0.68%) from September 30. The daily average price of imported unbleached pulp was CNY 5,075.00/ton, up CNY 133.33/ton or 2.70% from September 30; the daily average price of imported chemical mechanical pulp was CNY 3,858.33/ton, up CNY 33.33/ton or 0.87% from September 30. Overall, structural increases driven by costs coexist with a relaxed supply-demand landscape, resulting in a divergent and volatile market.

Strengthening costs in Q1 2026 may sustain pulp price gains, but demand-side factors continue to weigh on price increases.

Ongoing increases in international prices will heighten cost pressures in Q1, potentially encouraging producers to test higher pricing. Due to successive upward adjustments in hardwood pulp quotations from November 2025 to January 2026, the cost of imported pulp arriving in Q1 (assuming exchange rates remain stable) is projected to rise by approximately 6.28% quarter-on-quarter. This significant cost increase will directly support domestic pulp prices, prompting market participants to attempt higher quotes in sales. This cost-pass-through effect provides strong bottom support for sustained high pulp prices.

Supply growth in the pulp market is expected to moderate in Q1, further supporting elevated prices. Structurally, no new domestic production capacity is scheduled to come online in Q1. The primary increase in domestic output will stem from new capacity additions in Q4 2025, with Q1 production expected to grow by a limited 1.26% quarter-on-quarter. On the import front, multiple factors—including recovering overseas demand, rising domestic acquisition costs, and delayed South American shipping schedules—are projected to cause imports to decline by 6.34% quarter-on-quarter, thereby dampening overall supply growth. After accounting for a 13.85% quarter-on-quarter increase in opening inventories (calculated value), total wood pulp supply in Q1 is projected to grow modestly by 3.41%, with the growth rate narrowing significantly. Overall, the slowdown in supply growth partially offsets the pressure from weak demand. Combined with the halt in pulp market transactions during the Spring Festival due to downstream shutdowns and maintenance, pulp prices are expected to follow a pattern of rising sharply, then consolidating, before declining in Q1.

The pulp market in Q1 faces intertwined demand-side factors, which are the primary drag on price increases. On the demand side, although new capacity has been added for white cardstock, household paper, and cultural paper, these projects are concentrated toward the end of Q1. Combined with industry shutdowns for maintenance during the Spring Festival, total pulp demand in Q1 is projected to decline by approximately 10.36% quarter-on-quarter, indicating weak overall demand support. Concurrently, gross margins across the paper industry diverged: Culture paper manufacturers adopted profit-sacrificing inventory reduction strategies to counter competition, with double-coated paper and double-coated paper gross margins projected to decline by 3.04 percentage points and 3.43 percentage points respectively compared to Q4 2025, suppressing pulp price growth. Conversely, white cardstock and household paper benefit from the traditional pre-Spring Festival peak season driving paper price increases, with gross margins expected to rebound by 2.17 percentage points and 0.21 percentage points respectively, providing temporary support for pulp prices before the holiday. Overall, new base paper capacity additions have failed to effectively stimulate demand. Combined with pressure on industry profitability, the upward momentum of wood pulp prices may be constrained.

Fluctuations in pulp futures prices during the first quarter may cause temporary disruptions in the spot market. Price movements in the main pulp futures contract on the Shanghai Futures Exchange can easily trigger market sentiment resonance, amplifying industry players' psychological shifts during specific periods.

In summary, the imported wood pulp spot market is projected to follow a strong-to-weak trajectory in Q1 this year. Supported by pre-Spring Festival peak demand, rising overseas costs, and slowing supply growth, pulp prices may remain firm before the holiday. However, limited demand improvement and profitability pressures in the paper industry will cap upside potential. Concurrently, the financial attributes of the product will influence short-term price movements. Consequently, the overall pattern is expected to be a surge followed by oscillating declines.

The imported wood pulp market will exhibit divergent trends across pulp types, driven by their respective fundamentals, financial attributes, and cost dynamics. Softwood pulp, supported by its financial attributes and cost base, may continue narrow-range gains in January-February 2026 before potentially correcting in March due to demand pressures. Hardwood pulp will follow a similar trajectory, buoyed by bullish overseas markets and restocking, but will also face end-of-quarter downward pressure. Unbleached pulp prices may gradually weaken from January to March due to insufficient demand. Chemical mechanical pulp supply and demand remain relatively stable, with prices expected to stabilize before declining, following the broader market downturn in March. Overall, first-quarter average import pulp prices are projected to show mixed quarter-on-quarter movements. Prices for softwood pulp, hardwood pulp, and chemical mechanical pulp are expected at RMB 5,582.00/ton, RMB 4,643.33/ton, and RMB 3,855.33/ton respectively, representing adjustments of RMB 50.45/ton, RMB 239.45/ton, and RMB 34.97/ton compared to Q4 2024. representing increases of 0.91%, 5.44%, and 0.92%, respectively. Unbleached pulp is projected at 5,030.33 RMB/ton, a slight decrease of 38.44 RMB/ton or 0.76% compared to the fourth quarter of 2025.

As an integrated internet platform providing benchmark prices, on January 15th, the benchmark price for hardwood pulp, according to SunSirs.com, was 4750.00 RMB/ton, an increase of 1.42% compared to the beginning of the month (4683.33RMB/ton).

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