Will the Bullish Pulp Market Continue Throughout 2021?
SCI suggests that the price hike is mainly caused by the following factors.
First, the pulp futures price is bolstered by a series of bullish factors including the rising shipment cost, the general inflationary prospect, the successful launch of the vaccine, the anticipated tight hardwood chip supply, as well as the inflow of hot cash into the futures market.
Second, the new rounds of wood pulp import offer continued to increase. The SWP offers had cumulatively risen by $230/mt since the last quarter, and that for HWP rose by $170/mt. It is heard that orders have been placed for SWP shipments, putting cost pressure on the spot market. In the meantime, the price hikes were seen in other regions such as Europe, which supported the price hike in China.
Third, downstream paper producers in China released several rounds of price increase notices, and the market price of wood pulp tissue had gone up by RMB 1,300/mt cumulatively since Q3. Also, the pulp inventory edged down slightly, bolstering market sentiment.
