Analysis of the Pulp Market (4.10-4.14)

April 19, 2023

Imported Wood Pulp Market
Futures market: This week, the futures market was volatile, with port inventory at a high level, and external prices were reduced due to fluctuations. Supply side support for the pulp market was limited. Internationally, demand in overseas markets has not improved, with European port inventories accumulating in a narrow range, and inventory days in major global production countries have increased. In May, Arauco saw a silver star price of 720 US dollars per ton, a gold star price of 630 US dollars per ton, a star price of 550 US dollars per ton, and a silver star price of around 5680 yuan. Currently, the cost price is close to the spot price, and short-term pulp prices may fluctuate weakly. Domestic downstream raw paper manufacturers are slow in shipping, and downstream manufacturers often maintain the principle of using and replenishing as needed, resulting in weak market trading and limited support for pulp prices.
Spot market: The trading atmosphere in the market continued to be light this week, with a decrease in the enthusiasm of traders for offering, with real order negotiations being the main focus. Needle leaf pulp, with reference to the quotation of Silver Star 5550 yuan/ton in Qingdao region, Moon and Maple 5600 yuan/ton, Kailipu 6350 yuan/ton, Russian pulp 5450 yuan/ton, a decrease of about 200 to 350 yuan compared to last week. Broadleaf pulp and broadleaf pulp prices have significantly declined, with market reference to the quotation of Goldfish, Parrot, and Star 4400 yuan/ton in Qingdao region, Class II broadleaf pulp Lin and Bird 4250 yuan/ton, Alpi and Heping River 4150 yuan/ton, a decrease of about 250 to 350 yuan compared to last week. The natural color slurry has decreased by 200 yuan/ton compared to last week, with a reference quotation of 5400 yuan/ton from Venus. It is just in need of shipment; Affected by the overall market downturn, the market quotation for chemical mechanical pulp has been lowered by 200 yuan/ton, with a reference quotation of 4500 yuan/ton for Kunhe.
Packaging Paper Market
This week, the white cardboard market continued to hover at a low level; The market price is inverted in some cases, 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, there will be a slight tentative rebound, and most paper companies are in a wait-and-see state. The market has become the norm, and 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 white board paper market declined steadily and slightly by about 50 yuan/ton. The delivery price of mainstream paper mills is mainly negotiated. The delivery price negotiation space of surrounding paper mills is large, the purchase intensity of end users is poor, and the market transaction is 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, the prices of corrugated paper and box board paper have tentatively increased by around 30-50 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 domestic finished paper market is depressed and cautious, with a clear imbalance between supply and demand. The decline in the first quarter is gradually increasing, The repeated round and round maintenance of corrugated box boards has become a norm in the industry. 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.
Waste paper market
This week, the price increase of yellow waste paper slowed down until the weekend, with a range of 20 to 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 yuan/ton, 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 yuan/ton.

Author:

Mr. Ma Yanfeng

E-mail:

sandy@zhongzhi.cn

Phone/WhatsApp:

8615200088110