SunSirs: China Wood Pulp Price Fluctuated in January

According to the monitoring of the commodity market analysis system of SunSirs, the prices of softwood pulp and hardwood pulp showed a opposite trend in January. On January 31st, the average market price of softwood pulp in Shandong was 5,810 RMB/ton, a decrease of 0.68% compared to the average price of 5,850 RMB/ton on January 1st. On January 31st, the average market price of broad-leaved wood pulp in Shandong was 5,076 RMB/ton, an increase of 0.71% compared to the average price of 5,040 RMB/ton on January 1st.

By observing market changes, it can be seen that in early January, the spot prices of softwood pulp and hardwood pulp first increased and then decreased, with prices maintaining a range of fluctuations. In terms of supply, with the outbreak of political issues in the Red Sea region at the beginning of the month, the arrival time of domestic wood pulp at the port may be delayed, and the increase in sea freight has also raised costs. In addition, both international pulp production national inventory and European inventory have decreased, and bullish sentiment has boosted the price of wood pulp. Subsequently, the issue of Red Sea shipping gradually resolved, and the bullish factors for the rise of wood pulp have subsided. In addition, the slight decrease in external quotations in January has limited support for the domestic market. The inventory level has shifted from destocking to accumulating, leading to an increase in market supply and a downward pressure on wood pulp prices.

In terms of demand, there is still insufficient demand from downstream paper mills, and the market trading situation is sluggish. The domestic market has entered the off-season for consumption, and as the Spring Festival approaches, downstream paper mills are shutting down for maintenance one after another, resulting in a low operating rate in the industry. The terminal performance remains lackluster, with the market mainly focusing on sporadic demand for goods. Large and medium-sized paper companies are under inventory pressure in the market, which has led to a continuous reduction in demand for wood pulp and expectations, resulting in a decline in wood pulp prices.

In late January, the price of wood pulp continued to fluctuate. In terms of supply, the continued high import volume in the domestic market and slight accumulation of port inventory have created a downward driving force for the market. The continuous fermentation of the Red Sea incident also brings upward risks of tightening spot liquidity. In terms of demand, the production of broad-leaved pulp by enterprises has recently seen a narrow increase in equipment start-up, and downstream demand has shown slightly positive performance, resulting in an increase in the price of broad-leaved wood pulp. The latest external quotation adjustment has lowered the price of softwood pulp, but the spot market price of domestic softwood pulp has adjusted accordingly.

In terms of futures, on January 31st, the opening price of the SP2405 main contract for pulp futures on the Shanghai Futures Exchange was 5,702 RMB/ton, the closing price was 5,670 RMB/ton, and the highest price was 5,712 RMB/ton, with a daily decrease of 0.46%. The transaction volume was 357,000 RMB, and the position was 202,034 lots.

SunSirs Wood Pulp Analysts believe that as the Spring Festival holiday approaches, market trading is relatively flat, and downstream pre holiday stocking is basically completed. In addition, logistics have been suspended recently, and transportation costs are gradually increasing. Market wood pulp procurement is relatively cautious, and wood pulp prices will not show significant changes before the Spring Festival. The main changes will come from seasonal fluctuations after the end of the Spring Festival holiday, and it is expected that the short-term spot price of wood pulp may maintain a range of fluctuations.

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