Guotai Haitong Securities reported that as of February 27, the average market price for 70g wood pulp high-white offset paper in February was 4,725 yuan per ton, flat month-on-month but down 12.76% year-on-year. During the Spring Festival holiday, some production lines were shut down, leading to a month-on-month reduction in market supply. For white paperboard, most paper mills maintained stable prices due to cost pressures, with some implementing price protection policies, providing some bottom support for the market. Additionally, the extent of mill shutdowns during the holiday exceeded expectations, and pre-holiday inventories at most mills were low. Coupled with post-holiday restocking demand from downstream packaging plants, this supported an upward shift in the price center for corrugated paper. The main views of Guotai Haitong are as follows:
Cultural Paper: Mills Stabilize End-User Prices, Profits Recover As of February 27, the average market price for 70g wood pulp high-white offset paper in February was 4,725 yuan per ton, flat month-on-month but down 12.76% year-on-year. Key factors influencing the price trend include: 1) Paper companies' offers were largely stable, while overall shipments slowed; 2) Some production lines were idled during the Spring Festival, reducing market supply month-on-month; 3) Purchases of base paper nearly halted during the holiday, and post-holiday demand recovery was slow, providing insufficient support for paper prices; 4) The overall decline in the upstream wood pulp market resulted in weak cost-side support.
White Paperboard: Mill Prices Stable, Market Trading Stagnant As of February 27, the average monthly transaction price, including tax, for 250-400g sheet-fed white cardboard was 4,269 yuan per ton, up 0.02% month-on-month but down 1.13% year-on-year. Main reasons for the price movement include: 1) Under cost pressure, most mills adopted a market-stabilizing stance, with some executing price protection policies, offering some bottom support; 2) The Spring Festival holiday limited overall market transactions, reducing motivation for price adjustments; 3) Some traders offered discounts to spur orders before the holiday, but mainstream prices saw little change, with a focus on cautiously observing post-holiday demand recovery.
Corrugated Paper: Major Mills Raise Prices Post-Holiday, Profits Improve As of February 27, the average monthly price for China AA-grade 120g corrugated paper was 2,701 yuan per ton, down 1.57% month-on-month and down 5.89% year-on-year. Key factors affecting the price include: 1) The extent of mill shutdowns during the Spring Festival exceeded expectations, and pre-holiday inventories at most mills were low. Combined with necessary post-holiday replenishment by downstream packaging plants, this supported an upward movement in the price center for corrugated paper; 2) The price of key raw material waste paper fell month-on-month, providing weak cost support; 3) Major paper mills raised ex-factory prices early in the month, advancing post-holiday price increases to February 25, boosting bullish sentiment.
Waste Paper: Domestic Waste Paper Consumption Falls, Prices Decline Overall As of February 27, the average monthly price for mixed wastepaper was 1,515 yuan per ton, down 3.69% month-on-month but up 4.67% year-on-year. Main reasons for the price change include: 1) Finished paper sales slowed, fostering a bearish outlook among mills; 2) Before the holiday, recycling stations were keen to sell, leading to generally adequate arrivals at paper mills, which weighed on prices; 3) Leading paper enterprises steadily lowered their waste paper procurement prices, with other mills following suit.
Wood Pulp: Softwood Pulp Weakens, Broadleaf Pulp Import Offers Rise The average price for imported wood pulp declined overall in February, with subdued trading. Key influencing factors were: 1) The main pulp futures contract fluctuated near the bottom, and under the influence of basis price quotes, combined with active pre-holiday discounting by traders, spot prices for imported softwood and hardwood pulp fell; 2) Both supply and demand were weak for imported unbleached pulp and imported BCTMP, leading to softer average prices; 3) The extended holiday shutdowns at downstream paper mills further dragged down spot market prices for imported wood pulp.
Risk factors include disruptions to overseas wood pulp supply chains and weaker-than-expected downstream consumer demand.
Comments