Analysis of the Pulp Market (5.8-5.12)

May 15, 2023

Imported Wood Pulp Market

Futures market: This week, the futures market was volatile and the spot market was mostly on the move. In terms of overseas supply, external market fluctuations have decreased, European port inventories continue to increase, and China's shipping volume has increased, which has limited support for the wood pulp market; In May, the offer of Brazilian eucalyptus held steady on the previous round, and the planned shutdown and maintenance of Senbo, a major domestic Hardwood Pulp mill, affected the price change of hardwood pulp market. In terms of demand, downstream paper mills have recently concentrated in the market to purchase and replenish inventory. However, the weak market demand situation has not changed, and in the future, it may mainly focus on consuming inventory. The industry is expected to continue the weak trend, which has limited support for the pulp market.

Spot market: the market price rose slightly with the market this week, and the downstream just needs to purchase. Needle leaf pulp, with reference to the quotation of Silver Star 5250 yuan/ton in Qingdao, Moon and Horse Brand 5300 yuan/ton, Kailipu 5800 yuan/ton, Russian pulp 5150 yuan/ton, an increase of 50-100 yuan/ton compared to last week. Broadleaf pulp and broadleaf pulp can be sold externally due to limited supply, with a slight price increase of 100 yuan/ton. Market reference to the quotation of Goldfish, Parrot, and Star 4050 yuan/ton in Qingdao, Class II broadleaf pulp 4000 yuan/ton, and poplar wood 3900 yuan/ton. Downstream restocking is mainly based on demand. Natural color pulp, with average market trading atmosphere, with reference prices of 5100 yuan/ton for Venus and 4300 yuan/ton for Dolphins; The actual order of chemical pulp is negotiable, with a reference quotation of 4150 yuan/ton for Kunhe. The actual order can be negotiated.

Packaging Paper Market:

This week, the white cardboard market continued to hover at a low level; The market trading volume is average, and the actual transaction in the market is mostly based on 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; Raw material prices continue to decline, weakening cost support and increasing 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 shrink again, 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 4900-5500 yuan/ton, with a low-end reference price of 4850-5100 yuan/ton.
This week, the price of the whiteboard market was stable with a slight decline. This week, the discount for the mainstream paper mill whiteboard holiday ended. The market transaction was still dominated by single discussion and multi negotiation. The downstream customers and end users responded relatively flatly and still mainly supplemented the stock on demand. 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 cardboard have remained stable and fluctuated slightly, with some paper mills slightly adjusting around 30-50 yuan/ton. The preferential policies during the holiday period have ended, and the continuous downturn in the packaging paper market has permeated the industry. The prices of raw paper continue to be affected by the industry's supply and demand pattern and cost price changes, causing prices to decline under pressure. 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.
National waste yellow cardboard:
This week, as the packaging paper market enters the off-season, the performance of the domestic waste paper market is slightly chaotic. Some paper mills have slightly adjusted their purchase prices according to demand, with an increase or decrease of around 20-30 yuan. In terms of supply, the recycling volume of packaging factories 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 been relatively stable in recent times, with a reference price in the white waste paper market ranging from 1600 to 2650 yuan/ton.

Author:

Mr. Ma Yanfeng

E-mail:

sandy@zhongzhi.cn

Phone/WhatsApp:

8615200088110