SunSirs: China Wood Pulp Prices are still Rising, with Short-term Strong Fluctuations

According to the monitoring of the commodity market analysis system of SunSirs, the prices of softwood pulp and hardwood pulp have maintained an upward trend recently. On March 15, 2024, the average market price of softwood pulp in Shandong was 6,134 RMB/ton, an increase of 1.59% compared to the average price of 6,038 RMB/ton on March 10. On March 15th, the average market price of hardwood pulp in Shandong was 5,480 RMB/ton, an increase of 1.67% compared to the average price of 5,390 RMB/ton on March 10th.

By observing market changes, it can be seen that the spot price of wood pulp continued to rise last week, while the main contract price of pulp futures fluctuated with each other. In terms of supply, the Finnish Automobile and Transport Workers Union recently announced a fourteen day strike, causing port transportation to come to a standstill, which may have a reduced impact on the export supply of softwood pulp from Finland. In April, the external quotation for imported softwood pulp was slightly increased, and the price difference between coniferous and broadleaf was also stronger than expected. Therefore, the price difference between coniferous and broadleaf was relatively low, which has driven up the prices of both internal and external coniferous stocks.

As of March 14, 2024, the sample inventory of mainstream pulp ports in China was 2.011 million tons, a decrease of 1.0% from the previous period, and the inventory showed a trend of destocking for three consecutive weeks.

In terms of demand, the downstream paper mills are currently operating steadily, and the market procurement is relatively stable and active, providing favorable support for the demand for wood pulp. With the frequent occurrence of price increase letters in downstream markets, the profit structure of the terminal market is rebounding, and downstream demand is shifting towards a positive pattern. The expectations of gold, silver, and four are also constantly being fulfilled.

In terms of futures, on March 15, 2024, the opening price of the SP2405 main contract for pulp futures on the Shanghai Futures Exchange was 6,036 RMB/ton, the closing price was 6,044 RMB/ton, and the highest price was 6,066 RMB/ton, with a daily decline of 0.1%. The trading volume was 261,200 lots and the position was 213,124 lots.

SunSirs Wood Pulp Analysts believe that March to April is mostly a small peak season for the paper industry, and downstream raw paper prices may rise one after another, which may have a boosting effect on pulp prices in the short term. The rise in external prices of wood pulp also boosts market confidence, and it is expected that spot prices of wood pulp will be strong and volatile in the short term.

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