Uncoated Woodfree Paper Prices Expected to Slightly Rebound in June
Intro: After the May Day holiday, market players still held a wait-and-see sentiment, and the market trading remained insipid, leading to a slight decrease in uncoated woodfree paper prices. Tenders for publications continued, but publishers had not picked up the volumes ordered previously. Coupled with a limited recovery in market orders, the mainstream prices gradually moved down. In June, publishers may start to pick up ordered volumes, and paper mills may rush to deliver orders. Demand is likely to revive somewhat, and wood pulp prices hover at highs, so it is predicted that the uncoated woodfree paper prices will likely marginally rebound in June.
Uncoated woodfree paper mainstream prices went down in May
In May, the uncoated woodfree paper market prices continued to soften. According to SCI, as of May 29, the monthly average market price of 70g uncoated woodfree paper was RMB 5,745/mt, down RMB 124/mt or 2.11% M-O-M. In H1 of May, publishers’ orders continued to provide support, but market orders were lackluster, and prices saw minor changes. In mid-May, with publication tender prices releasing, some low-end prices emerged in the market, dampening downstream players’ confidence, and thereby dragging down dealing prices in some regions. However, due to high cost pressure, some paper mills announced price increase notices of RMB 300/mt effective in early June. Backed by that, market trading slightly warmed up in late May, and prices showed a stabilizing trend.
Sluggish market orders led prices to edge down
In May, most large-sized paper mills arranged steady production, and a few lines in East China and Central China underwent maintenance, slightly subduing the overall operating rate. According to SCI, the uncoated woodfree paper output was 823.8kt, up 0.40% M-O-M. The average operating rate of producers was 59.3%, down 1.73 percentage points M-O-M. With more calendar days, output remained relatively stable compared with last month, reflecting a decline in the average operating rate. The largely stable supply had a small influence on market prices.
In H1 of May, social orders remained weak, impeding paper mills’ destocking pace. In mid-May, with price increase notices and steady mainstream prices of publication tender orders, some downstream players restocked a small volume in late May, reducing paper mills’ inventory. According to SCI, the inventory days of uncoated woodfree paper mills increased by 0.77% M-O-M. At the end of the month, sales at some paper mills improved marginally, giving no effective boost to the market.
June may see improvement in demand, supporting the market prices
Demand: In June, publication orders may be successively picked up, propelling some paper mills’ destocking. At the same time, some booksellers may also show certain restocking demand after a round of consumption of previous inventory. The overall demand is likely to increase, boosting the uncoated woodfree paper market.
Supply: Paper mills will probably arrange stable production to deliver some publishers’ orders. So, supply available in the market may decrease, further underpinning players’ confidence.
Cost: The high-hovering wood pulp import offers and consistent supply-side disturbance will possibly continue to bolster wood pulp spot prices. However, downstream players have shown resistance to the current high prices, so some wood pulp prices may edge down. Overall, the wood pulp prices may change limitedly, which can still support the paper prices.
In general, with a potential increase in downstream orders, largely stable supply, and cost-side support, the uncoated woodfree paper prices are predicted to slightly rebound in June.
All information provided by SCI is for reference only, which shall not be reproduced without permission.
Please click "Read more" for the full article.
