Analysis of the Pulp and Paper Market (5.22-5.26)

May 29, 2023

Imported Wood Pulp Market:
Futures market: This week, the futures market was mainly volatile, with needle pulp spot prices fluctuating with the market, with a fluctuation range of 50-100 yuan/ton. In terms of supply, the prices of coniferous pulp and natural pulp have remained stable, while broadleaf pulp has reported an increase of $30/ton in the external market. The industry is reluctant to sell at low prices, and spot prices have increased by around 150-300 yuan/ton. In terms of demand, some profits in the finished paper market have been restored, but overall market demand has not improved significantly. Recently, the daily paper market has issued price increase letters to boost confidence in the pulp market. The implementation situation in the later stage and subsequent demand performance need to be further observed.

Spot market: The market price fluctuates widely with the plate this week, and the operators follow the market. Needle pulp, spot prices have slightly decreased, and transactions mainly require restocking. Referring to the Qingdao regional quotation of Silver Star 5300-5350 yuan/ton, Moon and Maple 5350 yuan/ton, Kailipu 5700 yuan/ton, Russian pulp 5150 yuan/ton, Ruian 5150 yuan/ton, and Beimu 6100 yuan/ton, the market supply of broadleaf pulp and broadleaf pulp is tight, and the combined quotation cost has increased by 30 dollars/ton. Traders are reluctant to sell at low prices, and the market quotation has increased by 150-300 yuan/ton compared to last week, Market reference prices for goldfish, parrots, and celebrities in the Qingdao region are 4400 yuan/ton, 4250-4300 yuan/ton for second-class broadleaf pulp, and 4200 yuan/ton for poplar wood. Recently, the enthusiasm of domestic paper companies in North China to purchase raw materials has increased, coupled with tight spot supply in the market and an increase in external quotations, which has helped to increase the price of broadleaf pulp. The natural color slurry is still not hot in the market. Please refer to the quotation of 5100 yuan/ton for Venus and 4650 yuan/ton for Tiangong and Dolphin. We will discuss the actual order; The actual order of chemical pulp is negotiable, with a reference quotation of 3950-4000 yuan/ton for Kunhe. The actual order can be negotiated.
National waste market:
This week, with rising temperatures and the gradual onset of the rainy season, the finished paper market is in the off-season, and the order volume of paper mills has slightly decreased. Finished paper inventory is above average, and currently the price of waste paper is hovering at a low level. Due to the drag of finished paper, the fluctuation range of waste paper has been adjusted by a narrow margin. On the supply side, the recycling volume of the packaging plant is gradually improving with the arrival of summer, and the market inventory has slightly increased compared to the previous period. 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; In addition, downstream finished paper has entered the off-season of the industry, and the market demand is insufficient. Distributors often restock according to orders, and the market demand is mainly in demand. The price of white waste paper is temporarily stable. 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 yuan/ton, taking East China as an example. The price of white waste paper has gradually declined slightly, with the reference price in the white waste paper market ranging from 1600 to 2600 yuan/ton.

Packaging Paper Market:
This week, the white cardboard market is still hovering at a low level; In the off-season of consumption, the market is mainly focused on wait-and-see, and actual transactions in the market are mostly based on a single negotiation. Under the light demand of the entire market, there is an oversupply, and enterprises are under pressure on production and sales, with flexible prices; Unstable raw material prices, weakened cost support, and increased downstream pressure on prices. Insufficient market demand, stable and slightly reduced orders from downstream printing and packaging factories, and delayed procurement progress; Traders have high inventory and lack confidence in the future market, mainly through price reduction and order promotion.

It is expected that in the later stage of the market, with the support of tight supply and rising costs, the price difference of white cardboard will decrease, and the increase in terminal demand will be lower than expected. The overall trend remains relatively strong, with limited acceptance by downstream end users, and market transactions are mostly dominated by negotiations.

As of now, the market quotation for white cardboard is between 4900-5300 yuan/ton, with a low-end reference price of 4850-5100 yuan/ton.

This week, the price of the white board market has been steadily declining. The preferential policies for white board of some mainstream paper mills have continued, and the surrounding small and medium-sized paper mills have slightly declined by 50 yuan/ton. Market transactions are still dominated by single negotiations and multiple negotiations, with downstream customers and end users experiencing relatively flat reactions and still focusing on replenishing inventory as needed. In addition, prices have been falling before, and some paper mills have started to lose money. Downstream markets are bearish towards the later stage, and paper mills have a strong intention to stabilize prices; At present, the fluctuation of raw material cost is limited, and the shutdown of large-scale enterprises is mainly to stabilize the market, which plays a supporting role in the market price. In addition, mainstream paper mills mainly focus on digesting inventory, while traders mostly focus on stable shipments with relatively few price changes. 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, the prices of corrugated paper and box board paper have slightly declined, during the traditional off-season, and the market has been sluggish. Most paper mills have continued to offer early discounts, while some have slightly lowered their prices by around 30-50 yuan/ton. The continued sluggish atmosphere in the packaging paper market has permeated the industry, and the prices of raw paper continue to be affected by the industry's supply and demand pattern and cost price changes, resulting in a downward pressure on prices. Box corrugated paper is currently in the bottom consolidation stage, and the effective transformation of the packaging paper market has become a sensitive point affecting industry confidence. Downstream packaging factories have low inventory of raw paper and have some space for restocking. However, the market remains cautious, and after a moderate restocking, they will still maintain a focus on just in demand procurement. It is expected that the finished paper market situation will continue to rise next week.

Market bearish/positive factors: shutdown, limited production and price protection, reduced inventory of paper companies, shutdown and maintenance plans, domestic paper imports have been adjusted for a period of time, and the price advantage of imported finished paper is gradually disappearing.

Author:

Mr. Ma Yanfeng

E-mail:

sandy@zhongzhi.cn

Phone/WhatsApp:

8615200088110