SunSirs: China Wood Pulp Prices Fluctuated in August, with Short-term Range Price Fluctuations

According to the monitoring of the commodity market analysis system of SunSirs, the price increase of softwood pulp in August was weak, while the price of hardwood pulp rose at a low level. On August 31st, the average market price of softwood pulp in Shandong Province was 5,733.33 RMB/ton, a decrease of 2.82% compared to the average price on August 1st. On August 31st, the average market price of hardwood pulp in Shandong Province was 4,183.33 RMB/ton, an increase of 1.46% compared to the average price on August 1st.

On the supply side: In August, due to the loss of processing profits in foreign pulp factories, the intention to reduce production and increase prices was relatively clear. Due to the impact of news such as production cuts and restrictions by some foreign pulp mills in mid month, the supply of broad-leaved pulp market is becoming tighter. Although some foreign pulp mills have carried out operations such as production conversion and restriction, the overall supply impact is relatively limited. The quantity of wood pulp sent to China by the main pulp producing countries has not significantly decreased, resulting in a relatively high level of domestic port inventory and a slow pace of destocking.

In terms of domestic port inventory, as of August 28th, the sample inventory of mainstream pulp ports in China was 2.084 million tons, a decrease of 2.3% compared to the previous period when 48,000 tons were destocked, indicating a trend of destocking. The inventory at Qingdao Port has decreased, the shipping speed has remained stable, and the proportion of needle pulp is relatively high; The inventory at Changshu Port has experienced a narrow decline, with shipments exceeding 100,000 tons within the week.

On the demand side: In August, due to the fact that the raw paper industry has not yet departed from the traditional off-season, the downstream raw paper industry's operating rate remained flat due to insufficient follow-up of terminal orders. In addition, the processing profits of downstream raw paper enterprises continue to compress, and their acceptance of high priced raw materials is relatively limited. At present, from the macro sentiment and terminal order situation, downstream expectations for the peak season of the market are relatively cautious, and procurement only maintains rigid demand, dragging down the trend of the pulp market.

In terms of futures: Recently, the price of pulp futures has been fluctuating with more or less fluctuations. As of September 1st, the closing price of the main contract sp2511 of pulp futures on the Shanghai Futures Exchange was 5040, with 242,900 transactions and 204,986 holdings.

The wood pulp analyst from SunSirs believes that the current inventory of wood pulp at ports is relatively high, and the market supply of goods is relatively loose. The room for improvement in downstream profits in the short term is still limited, and raw materials are still mainly in demand and inventory replenishment at low prices. It is expected that the short-term spot price of wood pulp will maintain a range of price fluctuations.

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