SunSirs: The Price of Wood Pulp Continues to Rise in China, and Short-term Prices Fluctuate widely

According to the monitoring of the commodity market analysis system of SunSirs, the prices of coniferous wood pulp and broadleaf wood pulp have maintained an upward trend this week. On April 19th, the average market price of coniferous wood pulp in Shandong was 6,390 RMB/ton, an increase of 0.95% compared to the average price of 6,330 RMB/ton on April 14th. On April 19th, the average market price of broad-leaved wood pulp in Shandong was 5,708 RMB/ton, an increase of 0.14% compared to the average price of 5,700 RMB/ton on April 14th.

By observing market changes, it can be seen that the spot price of wood pulp is still in an upward trend this week. In terms of supply, the international market supply disturbance factors are still ongoing, and there has been no improvement in overseas port transportation interruptions and shutdowns. International pulp mills have shown strong upward pressure, with the latest round of external quotations for coniferous and broadleaf pulp increasing, further supporting the strength of domestic imported wood pulp spot prices.

As of April 18, 2024, the sample inventory of mainstream pulp ports in China is 1.891 million tons, an increase of 0.9% from the previous period, and the inventory has shown a cumulative trend for two consecutive weeks.

In terms of demand, the current paper industry is still in the off-season, and the recovery of demand in the paper industry is hindered. Although there are expectations of releasing new production capacity, the improvement in profitability in the raw paper industry is not satisfactory. If demand continues to decline, it may result in very limited space for pulp to continue to rise.

In terms of futures, this week's pulp futures prices have turned from strong to weak, and the market trading atmosphere is lukewarm. On April 19, 2024, the opening price of the main contract of SP2409 pulp futures on the Shanghai Futures Exchange was 6,224 RMB/ton, the closing price was 6,290 RMB/ton, and the highest price was 6,318 RMB/ton, with a daily decline of 0.29%. The trading volume was 301,400 lots, and the position was 191,859 lots.

Downstream white cardboard prices have shown a downward trend, with an average market price of 4,873.33 RMB/ton for 230g-400g white cardboard on April 19, a decrease of 2.01% compared to the average market price on April 14. The current supply pressure in the white cardboard market is increasing without decreasing. With the continuous production of new production capacity, the overall supply pressure in the domestic white cardboard market is increasing. Combined with the recent increase in paper mill inventory, the supply of goods from traders needs to be digested, and the trend of oversupply remains evident. However, there is a seasonal downward trend in demand. Due to the increasing impact of weakened orders on the market and increased shipping pressure, paper mills are using profit margins to ensure their market share.

SunSirs Wood Pulp Analysts believe that the current wood pulp market is being supported by the continued upward trend in some foreign pulp quotes, which is supporting domestic spot prices. But as the port enters a state of accumulation, and the decrease in demand is greater than the decrease in supply, it will also drag down the trend of pulp prices. It is expected that the spot price of wood pulp will temporarily fluctuate widely in the short term.

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