The hottest fundamentals are bad, and the pulp pri

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The fundamentals are bad, and the pulp price has achieved a rational return

on November 27, pulp futures were listed on the Shanghai Futures Exchange. The weak fundamentals made the pulp futures price decline rapidly

weak demand superimposed on inventory pressure

futures trading is a kind of contract trading for forward delivery commodities. In fact, it comprehensively reflects the expectations of both supply and demand sides for the change of supply and demand relationship and price trend at a certain time in the future. The market oversupply is expected to be the main reason for the sharp decline in the listing of pulp products in the next three years. Wood pulp is mainly used in household paper, cultural paper and some packaging paper. After July, the paper industry should have gradually entered the peak season, but the year-on-year growth rate of output gradually declined. In November 2018, the output of household paper was 7.6 million tons, a year-on-year decrease of 12%, significantly lower than expected, showing a trend of slack in the peak season. In terms of cultural paper, influenced by the Internet and new media, the overall demand for cultural paper has shown a downward trend in recent years. The main consumer demand for double offset paper used for writing and printing is scattered in journals, books, office paper and other fields. In September 2018, the output of double offset paper was about 1169500 tons, a year-on-year decrease of about 9.43%

similarly, for the white cardboard, which can stabilize the air flow rate in the food and pharmaceutical industry during the experiment process, due to the slowdown of macroeconomic growth and the steady decline in consumer goods demand, the consumption of white cardboard fell. In September 2018, the domestic white cardboard output was about 898000 tons, a year-on-year decrease of about 3.39% and a month on month decrease of 3.06%. While the white cardboard market demand was strong in the same period last year, the paper mill started well, and the shutdown of the paper mill was rarely heard. The expectation of the peak season in September this year did not come true, and the paper mills' inventory rose and they arranged downtime one after another. The impact of weak downstream demand in the coated paper market on coated paper production continues to increase, and the monthly output of coated paper has been in a negative growth state year-on-year in the past year

prices are determined by supply and demand, and demand is often more likely to become an important driver of price rises and falls. In 2017, the prosperity and development of China's paper industry led to the rise of pulp prices. This year's consumption peak season, downstream demand did not meet expectations, and the increase in wood pulp imports from August to October can only be passively converted into port inventory. By the end of November, the total inventory of wood pulp in Qingdao port was about 900000 tons, an increase of about 130% year-on-year; Baoding's pulp inventory was 75000 tons, an increase of 149% year-on-year; Changshu port's wood pulp inventory was 540000 tons, an increase of 38% year-on-year. Inventories in various regions have been accumulating, significantly higher than the same period over the years. Transactions in the spot market are light, delivery is slow, and high inventories cannot be digested in the short term, which suppresses the spot price

the upstream and downstream profit distribution is uneven, and the pulp price has a return demand

with the slowdown of macroeconomic growth, domestic demand gradually weakens, while the raw materials and finished paper prices in the paper industry are at 3 Counting capacity is at a record high, further weakening consumer demand. In addition, the depreciation of RMB, the rising cost of wood pulp import, the decline in paper demand and the weakening of paper prices have worsened the business environment of the paper industry. According to the public data of China Paper Association, in the first three quarters of 2018, the main business income of papermaking and paper products enterprises increased by 10% year-on-year, and the profit increased by 1.5% year-on-year. The high price of wood pulp and the rising production costs led to the embarrassing situation of "increasing revenue without increasing profits" for papermaking enterprises, and the losses of loss making enterprises in the first three quarters were divided into mechanical and electronic types according to the structure and principle; Traditional mechanical products increased by nearly 40% year-on-year. The high pulp price has seriously eroded the profits of enterprises, and the uneven distribution of profits will inevitably lead to the unsustainable demand side, and the pulp price has a return to demand

as coniferous pulp is almost 100% dependent on imports, it is difficult for domestic downstream paper enterprises and midstream traders to have the pricing power of pulp price. The outer disc of coniferous pulp has remained high for a long time. In addition, the depreciation of RMB and the increase of import costs make it difficult for the price of wood pulp to return quickly in a short time. Paper enterprises are faced with the dual repression of weak demand and high cost, high finished product inventory, slow sales, and profits eroded by high pulp prices. Domestic paper enterprises are in a dilemma and choose to shut down for maintenance or reduce the operating load

the listing of pulp futures gives full play to the role of price discovery. Through the open, fair, efficient and competitive futures trading operation mechanism, it can more accurately reflect the real supply and demand situation and price change expectations, so that the pulp price can achieve a rational return in a short time, and play a strong guiding role in the overall profit rebalancing of the paper industry chain

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