SunSirs: The Price of Wood Pulp Rose and Fell in China in July, but continued to Fluctuate in the Short-term

According to the monitoring of the Commodity Market Analysis System of SunSirs, the prices of softwood pulp and hardwood wood pulp showed a mixed trend in July. On July 28th, the average market price of softwood pulp in the Shandong region was 5,430 RMB/ton, an increase of 2.84% compared to the average price of 5,280 RMB/ton on July 1st. On July 28th, the average market price of hardwood pulp in the Shandong region was 4,450 RMB/ton, an increase of 5.7% compared to the average price of 4,210 RMB/ton on July 1st.

By observing market changes, it can be seen that both coniferous and hardwood pulp prices showed an upward trend in early July. In terms of supply, there have been constant news of international market disturbances, with approximately 7,400 workers from over 30 ports in Canada starting to strike. This may have a certain impact on the later transportation of forest pulp and paper, thus highlighting the tense supply atmosphere and continuing to drive up wood pulp prices.

In late July, the prices of softwood pulp and hardwood pulp both fell briefly, the supply of wood pulp in the Spot market was stable, and the inventory of Qingdao Port, a major domestic port for pulp, continued to show a trend of de stocking. With the agreement reached by the Canadian International Terminals and Warehouses Alliance to resume work, the import volume of pulp in the later stage remains high, with limited support for wood pulp prices. The price of wood pulp is currently rising towards the end of the month, and the price increase is mostly driven by the increase in external quotations in August.

In terms of demand, in early July, due to the depreciation of the exchange rate and the rise in raw material costs, the price of wood pulp orders increased. In addition, the recent general rise in pulp futures market commodities has led to an upward trend in the bullish atmosphere of increasing pulp holdings. However, the overall transaction volume in the market is relatively low, and there is little fluctuation in the quoted price. The downstream market is still in a state of just in need of purchasing, and the focus of finished paper prices is constantly shifting downwards. Market procurement is more cautious and wait-and-see.

In late July, due to multiple listed paper companies' expected losses in their semi annual performance, terminal demand continued to be sluggish, and the paper industry's destocking status continued. With the weak downstream procurement atmosphere, the market is in a stalemate, and the demand for social gatherings is insufficient to boost, it is difficult for business owners to show optimism. Near the end of the month, with the expected increase in white card prices and a rebound in procurement, the spot price of wood pulp has significantly increased.

In terms of futures, on July 28th, the opening price of the SP2309 pulp futures contract on the Shanghai Futures Exchange was 5,506 RMB/ton, with the latest price of 5,544 RMB/ton, a daily increase of 0.69%. The transaction volume was 698,400, and the position was 276,050.

SunSirs Wood Pulp Analysts believe that the current spot price of wood pulp is mostly supported by external quotes and rising futures prices, with prices operating at high levels, and the performance of trade side prices is still strong. Following the peak season consumption expectations and downstream market price increases, it is expected that the short-term spot prices of wood pulp will continue to fluctuate.

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