Buyers Hold Cautious Sentiment About Pulp Purchasing
Introduction: Since mid-March, spot prices of downstream paper have declined, while paper mills' enthusiasm for pulp procurement has remained lackluster. Coinciding with pulp week negotiations in late March, sellers maintained firm pricing intentions while buyers continued price pressure demands, resulting in a stalemate and subdued market transactions. In April, new round import offers, actual transactions, and downstream demand recovery may influence wood pulp price fluctuations.
Declining paper prices weaken mills’ pulp procurement interest
As of the 26th, the weekly average price of wood pulp tissue was RMB 6,208.33/mt, down 0.98% WoW. Uncoated woodfree paper price averaged RMB 5,450.00/mt, flat WoW. Coated paper averaged RMB 5,820.00/mt, flat WoW, and ivory board averaged RMB 4,290.00/mt, down 0.23% MoM. Insufficient end demand coupled with softening in upstream pulp prices led to minor declines in paper prices.
In March, tissue mills maintained high operating rates, ensuring ample market supply. However, weak finished paper price increases dampened converters' enthusiasm for jumbo roll purchases, while falling pulp prices reduced cost support, driving wood pulp tissue prices lower. Ivory board saw no significant demand recovery, with downstream buyers mainly replenishing needs, prompting regional discounts that slightly lowered prices. For cultural paper, producers actively pushed for price hikes in early March, and traders resisted low-price sales due to cost pressures, driving overall price increases. However, prices stabilized after mid-March due to sloppy pulp prices and tepid demand. Overall, downstream paper mills showed no apparent interest for pulp procurement, and buyers and sellers remained cautious, resulting in stagnant pulp market transactions.
Pulp trading may still be done on a need-to basis in April
Large pulp mills' price adjustments will impact future import wood pulp costs and market sentiment. During pulp week negotiations, overseas market pulp sellers strongly advocated for price increases, while buyers firmly resisted due to profitability concerns, prolonging the stalemate and intensifying wait-and-see sentiment. New import offers and actual transactions will determine future cost pressures. Suzano has announced further price hikes for April shipments, and this may provide some support to domestic spot prices.
Some paper mills plan April maintenance shutdowns, potentially reducing operating rates and output for tissue and ivory board, while cultural paper only may see slight output increases with the expected partial restart at a major integrated player. Overall, wood pulp demand recovery in April appears limited, with paper mills showing restrained interest for pulp procurement.
While new import offers remain unclear, overseas suppliers' firm pricing stance continues to provide cost support for imported wood pulp spot prices. However, downstream paper mills’ cost-optimization strategies and stagnant high-price transactions persist. With weak terminal demand likely suppressing mills' operating enthusiasm and procurement activity, April imported wood pulp spot prices are expected to see fluctuations to the bear end.
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