Analysis of the Pulp and Paper Market (4.3-4.7)

April 11, 2023

Imported Wood Pulp Market

Futures market: This week, the futures market was dominated by shocks. On Sunday, several oil producing countries, led by Saudi Arabia, will voluntarily reduce production from May, igniting the market sentiment of crude oil and boosting the wood pulp market back above 5700. However, the overall market demand is weakening and difficult to improve in the short term. As of yesterday's close, the main 2305 contract's market price was 5636 points, a decrease of 0.56%; The market continues to decline, returning to recent lows. The demand for downstream raw paper manufacturers in China continues to be strong, with poor purchasing sentiment and weak support for the pulp market.

Spot market: This week, traders generally followed the market, with a light trading atmosphere and a decrease in their enthusiasm for offering, with real order negotiations being the main focus. Needle pulp, with reference to the Qingdao region's quotation of Silver Star 5850 yuan/ton, Moon and Maple 5950-6000 yuan/ton, Kailipu 6600 yuan/ton, Russian pulp 5650 yuan/ton, a decrease of about 50-200 yuan compared to last week. The prices of broadleaf pulp and broadleaf pulp continue to decline. It is reported that UPM Uruguay's annual production of 2.1 million tons of eucalyptus pulp pulp mill is ready for production; Recently, Arauco agents have started selling MAPA broadleaf pulp, and it is expected to produce 80000-850000 tons of pulp this year, with limited supply side support for the pulp market; Market reference prices for goldfish, parrots, and celebrities in Qingdao are 4700 yuan/ton, second-class broad-leaved unicorns and birds are 4600 yuan/ton, and Alpi and Heping Rivers are 4400 yuan/ton, a decrease of about 200 to 250 yuan compared to last week. The market just needs to buy the natural color pulp. The reference quotation of Jinxing is 5600 yuan/ton, down 50 yuan/ton from last week. The chemical mechanical pulp market offers less, and the market price fluctuation is limited. The reference quotation of Kunhe is 4950 yuan/ton.

Performance of the national waste market

This week, the price of yellow waste paper bottomed out and rebounded, until the weekend's rise spread to most markets across the country, with an overall increase of between 20-50 yuan/ton. In terms of supply, after a period of continuous decline in domestic waste paper prices, most traders and packaging factories are cautious in selling and shipping, resulting in a significant reduction in overall shipment volume. In terms of demand, the terminal market has gradually recovered after a period of recovery, and the market's purchasing power has slightly eased compared to last week; On the one hand, after shutdown and production restrictions, the price of raw paper has decreased; The inventory of raw paper has decreased to a low level; On the other hand, with high raw material prices and energy costs, the rebound in waste paper prices has become the main support for raw paper prices. The price of white waste paper is falling with that of yellow waste paper. In the off-season of finished paper sales by downstream paper companies, with the emergence of extreme prices and the restocking of waste paper raw materials by paper companies, there is a high possibility of short-term bottoming and bottoming in of waste paper prices, and the overall weakness is still difficult to change. The prices of discarded newspapers have partially declined, the market supply is low, and the trading atmosphere is light. It is expected that the market price in the later period will continue the current trend of slightly fluctuating operation.

At present, the reference price for yellow waste paper is around 1500-1650, taking East China as an example. The price of white waste paper has been relatively stable in recent times, with a reference price in the white waste paper market ranging from 1600 to 2000.

Packaging Paper Market Performance

This week, the white cardboard market remains sluggish; The market price has been under pressure again and again, and the actual transaction in the market is mainly based on negotiation. Most paper enterprises are cautious about goods delivery and hold a wait-and-see attitude towards the later market. The decline of pulp has brought caution to the overall market sentiment. The growth of downstream demand is slow, and the imbalance between supply and demand is obvious. In the past two days, the pulp has rebounded in a narrow range after it stopped falling, and some varieties of pulp in the market have experienced a tentative rise. The downstream paper mills have stopped rotating, and the market has seen expectations in the later period. The market price of wood pulp paper products is surging, and it is still in the bottom stage of fierce competition. The market response is poor, and the acceptance of end users is average. The actual transactions in the market are mostly negotiated.

It is expected that in the later stage of the market, most paper companies are in a wait-and-see state, and the market has become a normal state of light. The domestic paper market is gradually returning to fundamentals.

As of now, the market quotation for white cardboard is between 5000 to 5500 yuan/ton, with a low-end reference price of 4850 to 5100 yuan/ton.

This week, the price of whiteboard market hovered at a low level. The delivery price of mainstream paper mills was mainly negotiated. There was a large space for the delivery price negotiation of peripheral paper mills. The end user's purchasing power was poor and the market transaction was average. Recently, the low level of wood pulp raw materials and limited demand in the end market have led to poor performance in the white cardboard market. Due to the weak price rise in the downstream base paper market, the industry considered the cost pressure to restrain the initiative of pulp picking. The price fell, and the cost fell, creating a negative impact on the paper price. Therefore, we hold a cautious and optimistic attitude towards market expectations. It is expected that the market will be cautious in the later stage, and there may be changes in the market trend, which does not rule out the possibility of further market decline.

This week, after being shut down and limited in production, as well as a period of low price digestion, the inventory of corrugated paper and box board paper has decreased. The shipping price has tentatively increased by about 50 yuan/ton, while the prices of mainstream paper mills' tile paper and some recycled paper have increased by 50 yuan/ton. However, the demand in the end market is limited, and upstream paper companies lack strong support. In addition, early imported paper orders have arrived one after another. Under multiple pressures, the market for domestic finished paper is depressed and cautious, The imbalance between supply and demand is obvious, and the decline in the first quarter is gradually increasing. The repeated round robin maintenance of corrugated box boards has become the industry norm. The profit pressure of domestic paper mills is limited. After a period of shutdown and maintenance, the scale of paper mills has been tentatively increasing, and small and medium-sized paper companies in various regions have followed suit. With some paper companies reducing inventory pressure, it is expected that the finished paper market will continue its current upward trend next week.

Market bearish/positive factors: After the shutdown, production restriction, and price protection, the inventory of paper companies has decreased. After a period of adjustment in domestic paper imports, the price advantage of imported finished paper has gradually disappeared.

Author:

Mr. Ma Yanfeng

E-mail:

sandy@zhongzhi.cn

Phone/WhatsApp:

8615200088110