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date: 2019-07-13

International pulp prices have recently fallen sharply in Asian markets

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Source: Taiwan Paper News

Affected by factors such as sluggish demand in the Chinese mainland market and the escalation of Sino-US trade wars, international pulp prices have recently shifted from rising to lower. In the short-term market outlook, the industry tends to be conservative.

In January 2019, the international pulp price continued to fall in the Asian market following the fall of November-December 2018. In February, the South American pulp mills offered quotations for the Asian market, some of which remained flat and some declined slightly, due to the estimated In the Chinese mainland and other markets, the month coincided with the Spring Festival holiday, which caused the purchase to decrease. In March, the price of long and short staples in the Asian market rose across the board; in April, the price of long fiber (NBSK) in the Asian market was flat, and BEK was The price of the main LBKP is also roughly flat. Only the radiation slurry is raised by about 10~20 US dollars per ton. Among them, Arauco is priced at 720~730 US dollars per ton, and CMPC is 730~735 US dollars. However, in May, it began to drop sharply.

In terms of international market shipments and inventories, according to the Canadian PPPC (Pulp & Paper Products Council), at the end of March 2019, the total shipment volume of international commercial pulp was 4.771 million tons, an increase of 18% from the previous month, compared with 2018. The year-on-year increase was 2.7%. Among them, the shipment to the North American market is estimated at 664,000 tons, an increase of 0.45% compared with the same period of 2018; the shipment to Western Europe is estimated to be 1.283 million tons, a decrease of 4.5% compared with the same period of 2018; the export to the mainland China market is estimated to be 1.507 million tons. Compared with the same period in 2018, it increased by 4.65%. The above shipments were 97% relative to production, an increase of 6% from the previous month.

In terms of inventory, at the end of March 2019, the international commercial pulp inventory was 48 days, a decrease of 3 days from the previous month. Among them, the bleached long-fiber wood pulp was reduced by 3 days for 37 days; the bleached short-fiber wood pulp was reduced by 3 days for 59 days. Under normal circumstances, the balance days of long and short fibers should be 28~30 days for long-fiber wood pulp and 39 days for short-fiber wood pulp. It can be seen from the above data that even if the pulp stocks decrease at the end of March, the remaining stocks still far exceed the balance days.

According to industry analysis, the international commodity pulp mill is planned to increase prices in the Asian market in April. Among them, the long-fiber pulp price rose by US$20 per ton and the fluff pulp increased by US$40. However, due to the sluggish demand, the long and short fiber prices were almost maintained. Flat plate, only the radiation pulp is slightly higher. In May, it began to change from a short-term uptrend to a downward trend, and it was lowered several times a month.

Originally, the industry expects that after the Spring Festival, the market demand will pick up. At the same time, some pulp mills will be repaired in the first and second quarters, which will reduce the supply, and there will be no new capacity to put into production in the short term. rising. However, contrary to expectations, the price of pulp in May continued to fall.

It is reported that since 2019, the demand in mainland China has been sluggish, and the raw material inventory of the industry is still high, which makes the price of pulp unsupported. In addition, the pulp mills that were reluctant to sell in the market outlook are not at a loss, and they have to start selling. Pulp, for many reasons, led to a continuous reduction in pulp prices in May, and the pulp market changed in January. Among them, NBKP (radiation pulp mainly) monthly quotation changed from flat to decline, from the announcement of a reduction of 20 US dollars per ton, to a drop of 30 US dollars, and then fell to 20 US dollars by the end of the month, so the cumulative NBSK per ton drop of 30 ~50 US dollars; some pulp mills originally planned to reduce the price by 30 US dollars per ton in May and 50 US dollars in June, and then change the scheduled plan. In May, the price will be reduced by 70 US dollars, and the new price of radiation pulp will be reduced. At 730~735 US dollars per ton, it dropped to 660~665 US dollars.

As for the fluff pulp based on BEK (wood pulp), after two degrees of reduction, each time the decline of 30 US dollars, the total reduction of up to 60 US dollars per ton, making the new price of BEK down to 660 ~ 665 US dollars per ton. So far, in the Asian market, the prices of long and short staples have tended to be the same. It is reported that Indonesia's wood pulp has fallen below $600 per ton, while the Brazilian pulp price has dropped to $620 per ton.

In late May, the NBSK price per ton in the Chinese mainland market dropped to 5,500 yuan; the radiata pine was about 5,000 yuan; the BEK fell to 4,800 to 4,900 yuan, showing a downward trend in quotations. Overall, the spot price of pulp in the Chinese mainland market has been lower by about 50 yuan per ton than the futures price. However, in the European market, the pulp market remained basically flat. By the end of May, the offer was slightly weak. In the North American market, from April to May, NBSK and LBKP (BEK) saw a decline of US$20~40 per ton. Obviously, the price of pulp in the second quarter was not as expected in all major markets around the world.

Some practitioners pointed out that in the past, in the mainland China market, the import of pulp to the port totaled about 1 million tons. Now the port arrival volume has increased significantly to 2 million tons. This means that the pulp stock of the Chinese paper mill is too high, arriving in Hong Kong. The pulp is difficult to digest. Not only in the Chinese mainland market, the stock of pulp ports in the European market is currently increasing from 1 million tons to 2 million tons, indicating that the inventory is also too high.

It is reported that due to weak demand, downstream inventory is still high, coupled with the uncertainty of Sino-US trade war, Zuzano & Fibria (total capacity of 11 million tons), which has already acquired the world's largest production capacity, has decided to reduce production by 1.5 million tons. .

In June, the Canadian company Canfor announced that NBSK will drop 60 US dollars per ton, and South American pulp mills Arauco and CMPC will reduce radiation pulp by 30 to 50 US dollars per ton. For the market outlook, market participants believe that the decline will continue into the third quarter, but the decline is expected to gradually shrink.

According to industry statistics, this year, NBKP has dropped a total of 60 US dollars per ton, while LBKP has dropped 100 US dollars.

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