SunSirs: July Wood Pulp: Loose Supply Triggers Price Fluctuations

According to the SunSirs Commodity Market Analysis System, softwood pulp prices fluctuated throughout July, while hardwood pulp prices saw more increases than decreases. On July 31st, the average price of softwood pulp in the Shandong region was 5,900 RMB/ton, a decrease of 0.84% from the average price on July 1st. The average price of hardwood pulp in the Shandong region was 4,123.33 RMB/ton, an increase of 1.81% from the average price on July 1st.

Supply: The wood pulp market generally experienced loose supply in July, with production and shipments from foreign pulp mills operating relatively normally. With the resumption of production at Finland's Finnish pulp mill at the beginning of the month, market supply pressures increased further. This, coupled with the significant increase in new domestic production capacity, led to an oversupply in the wood pulp market, dragging down the price trend of imported pulp overseas.

Domestic Port Inventory: As of July 31, 2025, pulp inventories at major Chinese ports stood at 2.105 million tons, a decrease of 38,000 tons from the previous period and a 1.8% decrease from the previous period. During this period, inventories at Qingdao Port, a major domestic pulp port, showed an accumulation trend, with minimal fluctuations in port shipments, and inventories remained at a high level for the year. Inventories at Changshu Port also showed a decrease, with weekly shipments exceeding 100,000 tons. Inventories at Gaolan Port also showed a decrease, while inventories at other ports remained within a normal range.

Demand: Profitability in the downstream base paper industry continued to be under pressure in July. The base paper industry has long suffered from overcapacity. Against the backdrop of increasing pressure to destock, paper mills lowered upstream raw material prices to optimize raw material procurement costs. This, in turn, dampened downstream paper mills' enthusiasm for raw material purchases, dragging down wood pulp consumption and pulp prices, becoming the core driver of the downward trend in wood pulp prices.

Futures: Pulp futures prices fluctuated in July, with more declines than increases. As of July 31, the main contract of Shanghai Futures Exchange pulp futures SP2509 fell 2.5% daily, with a trading volume of 205,100 lots.

SunSirs analysts believe that domestic macroeconomic sentiment is currently significantly influencing wood pulp prices, while international pulp mills are reluctant to offer further profit concessions, which may provide short-term stability to the overseas pulp market. However, weak demand and competition in base paper prices may further exacerbate downward pressure on the price center. In the short term, wood pulp spot prices are expected to fluctuate weakly.

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