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From the fourth quarter of the previous year to the first half of this year, pulp prices in major global markets, including North America, Europe and Asia, continued to rise, regardless of the rate of increase and growth, and the length of time is unprecedented. Until the third quarter of this year, international pulp prices began to show different trends in different markets.
Trend of global commodity pulp prices from 7 to September
As can be seen from Table 1, the sharp decrease in international trade volume of commodity pulp in July, the friction of world trade, the high pulp price, and the import restriction of waste paper in mainland China have all become important factors affecting the sharp drop in the shipment volume of commodity pulp in that month.
In the Asian market, the quotation of commodity pulps remained stable in July, and the spot price of some short fibre pulps increased slightly. In August, the price of commodity pulp in Asian market dropped sharply. The price of long fibre pulp dropped by 50 US dollars per ton in mainland China, while the price of short fibre pulp remained stable. However, in order to cope with the impact of Sino-US trade war, the price of long fibre pulp first increased by 20 US dollars per ton in July and then further decreased by 30 US dollars per ton in August. In other Asian markets outside mainland China, including Taiwan, Japan and South Korea, the price of long fibre pulp has dropped by $30/t, while the price of short fibre pulp has remained flat.
In September, the price of long fibre pulp rebounded in Asian markets, including mainland China. The price of long fibre pulp rose by $20 per ton to $880-935 per ton (mostly around $890 per ton), while the price of short fibre pulp remained stable, ranging from $780 to $800 per ton.
In the European and American markets, especially in the United States, strong demand led to a rise in pulp quotations in the third quarter. The market situation in Europe is slightly weaker than that in North America (including the U.S. market). Commodity pulp prices remained stable from July to September, with long fibre pulp quoted at about $1,230/t and short fibre pulp quoted at about $1,050/t.
From the stock situation, the stock of long and short fibers has exceeded the balance days in August, but the increase of the stock of long fibers is not as fast as that of short fibers, which may be a major factor in the frequent price increase of long fibers and the stable state of the price of short fibers.
International commodity pulp price trend in October
In October, international commodity pulp prices continued to rise in the North American market, with long fibre pulp rising by $30 per ton to $1,430 per ton and short fibre pulp rising by $20 per ton to $1,270 per ton, reaching an all-time high again, reflecting the strong demand in the United States market. European market pulp prices remained stable.
The price of long and short fibre pulp has not changed in the Asian market, but Canfor Pulp Mill in Canada, which has two pulp lines with a total capacity of 600,000 t/a, has shut down the pulp production line for 70-80 days since late September due to the damage of the boiler. It is estimated that the output of long fibre pulp will be reduced by 60-70,000 t. As a result, the company announced an increase in the price of long fibre pulp in the Asian market in October at $30 per ton and a new price of $965 per ton. Whether it is acceptable downstream remains to be seen.
For the future market, industry insiders believe that the 11 long holidays in mainland China and the implementation of import restrictions on waste paper have caused downstream paper mills to stop production because of the lack of raw materials, resulting in lower demand for pulp, which is an important reason why commodity pulp prices in the Asian market remained stable in October. Market participants believe that the Sino-US trade war may continue for quite a long time. Since September 24, the Chinese mainland has imposed a 5% tariff on imported pulp from the United States. Although the volume of pulp imported from the United States will decrease, it is expected that the volume of pulp imported from other countries such as Canada will increase, together with exchange rate fluctuations, and other factors, may promote it. To keep the pulp market in a moderate and upward trend, of course, the international economic and trade situation is variable, and the future trend of pulp prices still needs to be continuously observed.