Last Wednesday, pulp futures prices surged 5.01% to 6,366 yuan/ton. In the downstream raw paper market, price increase letters are frequently issued, and the rebound in the price of white cardboard still supports the pulp price. At the same time, with the arrival of the Q3 industry peak season, the downstream boom has rebounded. The operating rate of downstream pulp mills is expected to increase, and the market's demand for pulp is expected to increase. In addition, the increase in external quotations has also provided a rebound momentum for domestic pulp futures.
The analysis believes that the main event drivers come from three:
First, since entering the third quarter, the wildfire situation in Canada's B.C. province has not been significantly improved. Just one week after Canfor announced that its B.C. plant would reduce its production capacity of 115 million board feet in the third quarter, Interfor also announced that its sawmill in B.C. was facing the risk of shutting down due to local wildfires and raw material supply problems. According to current information, Interfor expects to cut at least 50 million board feet of production capacity in August. Depending on the changes in weather conditions, there may be further production cuts and shutdowns in September.
Second, the downstream white cardboard and household paper issued price increase letters to stimulate shipments. Take the white card as an example. In August and January, four companies of the three major groups, which accounted for about 85% of the domestic white card paper market, issued price increase notices at the same time. Starting from August, the price of white card and copperplate card paper increased by 200 Yuan / ton. The bottom price guidance letter was issued at the end of June; it rose 500 yuan in mid-July, and another 200 yuan was raised at the beginning of August. The willingness of leading paper companies to keep prices supported the pulp prices on the disk.
Third, in August 2021, Canada's first-class bleached softwood pulp was quoted at US$890/ton, which was stable at the previous round. The trend of overseas suppliers to cut prices has stopped. This also released a relatively positive market signal.
In the short term, there will be some resistance in the 6500-6600 line. The real terminal demand in the peak season will be tested later.
Entering the third quarter, the paper package industry will usher in the industry’s historical “golden nine silver ten” stage. Generally speaking, market demand and the number of orders will increase significantly by then. With the advent of August, the price of whiteboard and corrugated paper will rise first, 50- Although the increase of 100 yuan/ton was relatively small, it still caused a large reaction from the downstream packaging industry. On August 1, many paper companies including Cotai Group App (China), Bohui Paper and other paper companies issued price increase letters again, announcing that they would increase product prices ranging from 50-200 yuan/ton from August 1. The paper industry announced an opportunity to shut down.
As upstream paper companies announced price increases, cardboard factories in some areas have also begun to issue price increase letters following the increase. The price of cardboard in Anhui, Shandong, Hubei, Henan, Jiangsu and other places increased by about 3%. The price of national waste has also rebounded significantly, with the highest increase of 50/ton today, and the waste paper index 2245.24, an increase of 0.12% from the previous month.
At the same time, the recurrence of the domestic epidemic also brought volatility to the paper price trend in August. On the one hand, the recurrence of the epidemic will lead to an increase in the production and transportation costs of the paper bag industry; on the other hand, the recurrence of the epidemic may affect the consumer market, thereby affecting the end demand of the paper bag industry.
In addition, from the perspective of the import situation of corrugated paper in the first half of the year, the cumulative import volume of corrugated paper from January to May 2021 is about 1,306,100 tons, a year-on-year increase of 2.18%. It is not difficult to predict that in the next period of time, imported paper will still be restricted by factors such as sea freight price increases and tight shipping schedules in the second half of the year, which will further weaken the impact of imported paper on domestic paper prices and help ease the pressure of domestic paper price competition. .
Regarding the future trend, Guotai Junan Futures believes that downstream white cardboard and household paper issued price increases to stimulate shipments, which will provide certain support to the pulp market. Short-term pulp market transactions will still be relatively rigid, and spot offers for standard products fluctuate slightly with pulp futures. Under the influence of bullish conditions, stabilization is expected to be strong.
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