Pulp prices have been rising continuously Will the uptrend continue?

Since mid-June, pulp prices have risen continuously, and the cumulative increase has been close to 10%.

As of the close of trading on July 5, the main pulp futures price of 5,384 yuan/tonne, up 0.94%, up 9.3% from June 8, refreshing the new high since April 21st.

In this regard, Li Xin, pulp analyst at Shenyin Wanguo Futures, believes that pulp futures have seen a continuous rebound in recent days, mainly boosted by strikes and mountain fires in Canada, and the market's concerns about supply contraction have resurfaced.

Recently, Canada's International Longshore and Warehouse Union (ILWU) issued a formal 72-hour strike notice to the British Columbia Maritime Employers' Association (BCMEA) after collective bargaining between the two sides reached an impasse. The strike has brought most of the ports on Canada's west coast to a standstill, and if the two sides still can't reach an agreement or the strike continues, it could have some impact on the transport of forest pulp and paper products.

It is learned that due to the abundant resources of pulp raw materials, Canada has been a big producer of pulp and one of the important sources of pulp imported from China.

At the same time, Canada is facing the most serious forest fires in history, as of June 30, the whole of Canada's mountain fires over an area of more than 8 million hectares, with Quebec, and Alberta as the main affected provinces. Although the direct impact on pulp raw material production areas may be more limited at present, the mood of the pulp prices provides strong support.

However, for the subsequent trend of pulp prices, the industry generally believes that it will not always be at a high level. On the one hand, the Canadian strike and mountain fires may have a limited impact on pulp futures, on the other hand, the global pulp market supply exceeds demand trend remains difficult to reverse, this year, the world will put into production more than 4 million tonnes of new pulp production capacity.

Oriental wealth network pointed out that this year, the global broadleaf pulp capacity growth rate of nearly 10%, the demand side in Europe and the United States under the background of interest rate hikes show a weak trend, and the overseas supply pattern turned loose. Considering the demand side of the last five years has not appeared more than 3.2% growth, the domestic supply will also show a surplus situation.

Huatai Futures also said that at present, the domestic ports of pulp stocks are high and downstream willingness to take goods is not the case, pulp prices are difficult to have a significant rebound, and the exchange rate changes on the support of pulp prices is limited, the late need to pay attention to the recent government will be whether to issue an effective policy to boost consumption.