Analysis of the Pulp and Paper Market (7.10-7.14)

Imported Wood Pulp Market:

Futures market: This week, the futures market rose first and then fell, boosted by the impact of Canadian port strikes, some pulp mills reducing production, and the depreciation of the RMB exchange rate, boosting confidence in the pulp market; Arauco's July offer adjusted, with needle leaf pulp silver star retreating by $20 to $660 per ton, and broadleaf pulp star retreating by $20 to $515 per ton. This week, inventory in Hong Kong decreased by 3.57% month on month, showing a trend of destocking. The Canadian International Terminals and Warehouses Alliance reached an agreement on Thursday and began resuming work. The downward pressure of the overseas economy has continued to weaken demand, with European port wood pulp inventories still at historical highs. Domestic imports in June remained high, with a decrease of 4.2% month on month and a year-on-year increase of 28.5%. This has limited support for the pulp market. During the week, multiple brands of household paper, white cardboard, and Cultural Paper issued price increase letters, ranging from 100 to 200 yuan/ton. We need to continue to monitor the implementation of downstream price increase letters.

Spot market: The market fluctuated this week, first rising and then declining. The spot price of coniferous pulp goes with the market, and the industry is reluctant to sell at a low price. With reference to the quotation of Silver Star 5350-5400 yuan/ton, Moon and Horse 5400-5450 yuan/ton, Russian Pulp 5150 yuan/ton, Kelip 5900 yuan/ton, Beimu 5850 yuan/ton, and broadleaf pulp, the supply of goods in the Spot market is limited, and the price is stable and rising. The market refers to the quotation of Goldfish, Parrot, Star 4400 yuan/ton, Class II broadleaf pulp 4350 yuan/ton, and poplar 4300 yuan/ton in Qingdao; Natural color slurry, with little market price change, just needs to be purchased for trading, with a reference quotation of 5300 yuan/ton from Venus; Chemical mechanical pulp, with a reference quotation of 3850 yuan/ton for Kunhe, is mainly purchased on demand in the market.

Performance of the national waste market:
This week, the mainstream prices in the waste paper market have slowly declined slightly, with overall performance showing significant stability and slight fluctuations. Some paper mills have slightly increased their demand, while some paper mills in the southern market have slightly increased their demand, with little change compared to last week; The domestic demand for finished paper remains weak, and due to the drag of finished paper, the fluctuation range of waste paper has been adjusted in a narrow range. 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 has slightly declined, with the price of white waste paper decreasing by about 20-30 yuan/ton compared to last week, indicating average market demand. In the off-season of finished paper sales for downstream paper companies, with the emergence of extreme prices and the replenishment of waste paper raw materials by paper companies, there is a high possibility of short-term bottoming out 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 may continue to fluctuate slightly in the current trend in the later stage.
At present, the reference price for yellow waste paper is around 1400-1550 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 1400 to 2550 yuan/ton.

Packaging Paper Market:
This week, the white cardboard market is still hovering at a low level; With the recent rebound in spot prices of major raw material pulp and the strong rise in prices of other white paper categories, the trend of rising cost inventory in the later stage will squeeze the profit space of white cardboard. The production of new production capacity is gradually increasing, and demand continues to decline during the off-season. In the late stages of the payment cycle, there is downward pressure on the market's trading center. In the current context of intensified price competition, the turning point of market trends has not yet emerged. If paper prices continue to fluctuate near or even below the cost line, it will have a sustained impact on market operations, and the supply side pattern of the market will be integrated or accelerated.

It is expected that in the later stage of the market, there will be insufficient market benefits, and the price center may shift downward as a whole. The operating load rate of new production lines is still in a climbing period. With the continuous release of production, the oversupply situation will expand to some extent. The overall trend remains relatively strong, with limited acceptance by downstream end users and limited room for further adjustment.
As of now, the market quotation for white cardboard is between 4100 to 4600 yuan/ton, with a low end reference price of 3950 to 4300 yuan/ton.

This week, due to limited demand from downstream end markets and imbalanced supply and demand, the price of whiteboard paper in the market continued to decline slightly. Some small and medium-sized paper mills saw a decline of 50-100 yuan/ton in whiteboard paper, while most paper mills in other regions maintained stable quotations, but the actual prices declined quietly. Market negotiations were the main focus, and the enthusiasm for whiteboard paper mills to start construction was not high. The Chongqing base of large-scale paper mills mainly produced coated kraft cards and white faced kraft cards in the first half of the year, In the first half of the year, PM32 in Dongguan Base began to produce grey bottom white board paper. Due to the high inventory pressure, some paper mills in East China stopped for maintenance in succession. In the traditional off-season, downstream procurement mentality is cautious, with limited incremental new orders; At present, there is a significant supply pressure in the market, and paper mills are under pressure to ship. The supply-demand contradiction pattern is difficult to alleviate, and the trend of the whiteboard market is difficult to improve. There is still a risk of decline, with a focus on the price policy of large-scale paper mills. 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, overall, the market trend of corrugated paper and box board paper has been stable and declining, with some paper mills implementing quantitative preferential policies for shipment, resulting in a weak trading atmosphere in the market. The terminal orders are limited, and the overall shipment progress of the market is slow. In addition, the price trend of raw material pulp is fluctuating downward, and the market lacks positive support. Some companies have lowered their quotations in line with the trend, and some paper mills have slightly lowered their prices by around 30-50 yuan/ton. The continuous downturn in the packaging paper market is spreading throughout the industry, and the price of raw paper continues to be affected by the industry's supply and demand pattern and cost price changes. The main raw material waste paper prices have declined, which is influenced by the mutual transmission effect of upstream and downstream products, Forming a certain negative impact on the raw paper market; Finally, the market is currently in a downward channel, with poor willingness to purchase downstream and average overall market trading volume. 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 still maintain a focus on purchasing on demand.