According to analysis, Guotai Haitong Securities released a research report indicating that the spot market for imported wood pulp in January saw coexisting bullish and bearish factors, with significant structural differences leading to divergent price trends. Among these, hardwood pulp prices rose, while white cardboard producers continued issuing price hike notices. Cultural paper prices stabilized, though profitability faced slight pressure. It is projected that wood pulp market supply will first decrease then increase, with demand follow-up being insufficient. White paper prices are expected to gradually transmit increases, while black paper prices remain under pressure. The main viewpoints of Guotai Haitong Securities are as follows:
Cultural Paper: Mills Stabilize End-user Prices, Profitability Under Pressure As of January 28th, the average market price for 70g wood pulp high-white offset paper in January was 4,725 yuan per ton, down 0.08% month-on-month and down 12.66% year-on-year. The primary reasons influencing the price trend are: 1) Paper enterprises continued sales policies from the previous month, with some transactions being negotiation-based; 2) Distributors primarily adopted a cautious approach to purchasing, prioritizing inventory reduction at year-end, with order acceptance prices mostly stable; 3) Downstream publishing orders continued to draw goods, but new orders from the broader market were limited, with raw paper purchases leaning towards essential needs; 4) The upstream wood pulp market showed divergent trends, providing limited cost support for offset paper.
White Cardboard: Price Increase Notices Drive Prices Up, Distributor Restocking Intentions Weak As of January 28th, the monthly average market transaction price, including tax, for 250-400g sheet-fed white cardboard was 4,268 yuan per ton, up 0.73% month-on-month but down 0.74% year-on-year. Key factors affecting the price change include: 1) Limited relief from cost pressures led major paper mills to continue issuing notices promoting price increases; 2) Trade sellers faced inverted costs and selling prices, focusing mainly on reducing inventory through sales and approaching price hikes cautiously; 3) Terminal order volumes were limited, resulting in poor sales performance for distributors.
Containerboard & Corrugated Paper: Mill Price Increase Plans Not Fully Realized, Profitability Pressured As of January 28th, the monthly average market price for China AA-grade 120g corrugated paper was 2,751 yuan per ton, down 11.60% month-on-month but up 5.82% year-on-year. Main reasons for the price movement are: 1) Price increase notices from major mills at the start of the month were not fully implemented, shifting instead to price protection policies with repeated reductions in ex-factory prices; small and medium-sized mills, holding high inventory, opted to actively reduce margins to boost sales; 2) The primary raw material, waste paper, continued its downward trend; mills, aiming to avoid risks associated with high-cost raw materials, successively lowered purchase prices for waste paper, resulting in weak cost support; 3) Pre-holiday orders from terminal customers gradually increased, leading to higher order volumes for downstream packaging plants and consequently increased consumption of corrugated paper.
Waste Paper: Domestic Waste Paper Consumption Declines, Overall Price Decreases As of January 28th, the monthly average market price for mixed waste paper was 1,574 yuan per ton, down 10.29% month-on-month but up 2.13% year-on-year. Factors influencing the price trend include: 1) Finished paper sales weakened, increasing bearish sentiment among mills, prompting some to lower procurement prices; 2) Approaching the Spring Festival, recycling stations showed increased willingness to sell, leading to an overall rise in deliveries to paper mills; 3) Procurement prices from leading paper companies fell initially then stabilized, with other mills following the downward trend, thereby dragging down the overall market price.
Wood Pulp: Softwood Pulp Edges Down, Offshore Hardwood Pulp Quotes Continue Rising The imported wood pulp spot market in January was characterized by a mix of bullish and bearish factors and notable structural differences, leading to divergent price paths. Key drivers include: 1) The main wood pulp futures contract weakened fluctuated lower; under the basis price quotation model, this dragged down the average spot price for imported softwood pulp; 2) Offshore quotes for imported hardwood pulp continued their upward trend, with strengthening cost factors offsetting the pace of decline in domestic hardwood pulp spot prices, ultimately driving a slight month-on-month increase in the average import price for hardwood pulp; 3) Imported unbleached kraft pulp faced downward price pressure due to increased supply and weak demand; 4) Imported chemi-mechanical pulp saw narrow price increases amidst stable supply and demand, supported by tight availability of circulating supply.
Risk warnings include disruptions to overseas wood pulp supply chains and weaker-than-expected downstream consumer demand.
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