Burst! Pulp futures limit lower Is the market weak or the national naming works? How will the market trend in the later stage?
Source: Today's Paper Price China Paper Online
After the State Council has repeatedly mentioned the issue of concern about the rise of commodities, the spot price of pulp futures has recently weakened to a certain extent. On May 27th, pulp futures fell for the sixth consecutive trading day. The main pulp market fell by 6.03% and was in a state of limit, to 6,020 yuan/ton, a record low this year.
As the market bottomed out in May and rebounded, after the "618" e commerce festival was over, the market trend obviously began to weaken. Coupled with successive supervision actions, the rise of domestic commodities has basically come to an end.
The National Bureau of Statistics said: The high prices of bulk commodities have increased the pressure on the production and operation of the middle and lower reaches of the industry. In the next stage, in accordance with the decision and deployment of the Party Central Committee, we must scientifically implement macroeconomic policies, do a solid job in ensuring the supply and price stability of bulk commodities, continuously consolidate the foundation for economic stability and recovery, and promote the sustained and healthy development of the industrial economy.
As a major paper making country, China has consistently ranked first in the world in its pulp imports since 2003. Wood pulp imports will reach 30.64 million tons in 2020, and imported wood pulp accounts for 72.8% of total wood pulp consumption. As of April 29, 2021, the prices of imported softwood pulp and imported hardwood pulp were RMB 7,120/ton and RMB 5,288/ton respectively, up 60% and 49% respectively from the low in 2020.
As of April 2021, the price of pulp has risen from USD 606 per ton in September 2020 to USD 907 per ton in April 2021. Such a substantial increase has never been seen in the history of the industry. Rising prices of imported raw materials have brought cost pressures to Chinese paper companies. It is not surprising that major companies have issued price increase letters. This also led to the beginning of the year when the market price rose mainly due to the rapid increase in pulp prices. The rise in domestic and foreign industrial chain prices produced a linkage effect, which led to a mighty resonance price increase.
Until the beginning of May, the traditional off season of domestic papermaking, the operating rate of paper mills may continue to decline, the market demand for pulp will decrease, the price of raw materials will continue to fall, and the downstream market cost pressure will ease. However, from the perspective of supply and demand, the decline in pulp prices is not Will bring about an improvement in downstream demand. In the face of paper price fluctuations, the market has also heard voices that the series of events such as pulp falling, paper mill shutdowns, and frequent naming may become a turning point in the paper industry. Then how will the subsequent market develop?
There is no factor that has the greatest impact on market conditions than terminal demand. From the demand side, the impact of rising paper prices on consumer prices is limited, and the paper industry is less likely to embrace price increases.
In addition, the recent bulk commodities are in the retracement stage after the previous overheating and rising, and the paper industry's traditional off season feedback has been superimposed on the tightening of domestic macro policies, so there has been a continuous decline in pulp futures and even a lower limit, but the market will return in the future Changes in the low and peak seasons of the industry itself.
This sharp drop in pulp futures not only reflects the current state of the market, bottoming out, and the lack of demand support will naturally fall back, but it also reflects the government and society's regulation of the abnormal price increase of raw materials. After all, the price fluctuations of bulk commodities Concerning people's livelihood, it involves all aspects of social life. The unstoppable rise of commodities may eventually paralyze the industry and affect the daily operation of society. It is believed that under the self regulation of the market and the macro control of the country, the later paper industry market fluctuations will eventually return to the development cycle and law of the industry itself.