2024 China pulp market trend forecast

February 01, 2024

2024 China pulp market trend forecast

 Affected by multiple factors, the 2023 pulp price shock operation

 In 2023, the spot market price of imported wood pulp showed an "M" shaped trend, which was mainly due to the volatility of the main pulp futures contract price of Shanghai Futures Exchange during the year, the external market first suppressed and then the rise, and the supply side continued to increase. Although the demand side was moderate recovery, the overall recovery was not as expected.

 In 2024, the optimization of China's pulp supply and demand pattern is relatively limited, and the pulp price is still running under pressure. There are still new production capacity of broad leaf pulp and chemical pulp at home and abroad, and the supply side continues to be abundant. At the same time, the integration process of pulp and paper in China is accelerated, and the dependence of Chinese imported wood pulp is expected to decrease. China's demand, in 2024 in China's paper industry capacity expansion cycle, pulp and paper integration characteristics, industry concentration continues to improve, superposition of the international and domestic situation uncertainty, and supply and demand or continue to expand, imported wood pulp outside or pressure operation, and then the spot market at the bottom of the price support.

 From a supply perspective, China's pulp supply side in 2024 is relatively loose. According to incomplete statistics, in 2024, the new production capacity of domestic and foreign pulp is expected to be more than 10 million tons, among which the new production capacity of foreign pulp is basically distributed in South America and Europe, and its export destination is mainly China, so the import volume is expected to increase by 5.94%, leading to a year-on-year increase of 8.29% in the total supply. In general, China's pulp supply pressure increment, negative for the high pulp price operation.

 From the perspective of demand, the growth rate of China's total pulp demand is stable in 2024. According to incomplete statistics, in 2024, China's new production capacity of pulp downstream base paper is close to 10 million tons, but due to the speed and time of production capacity, the total demand increased by 7.61% year on year. The increment of aggregate demand is good for the volume of the pulp market, but because the demand growth rate is lower than the supply growth rate, the imbalance between supply and demand in the pulp market is still obvious, so the support for the pulp price is weakened.

 From the perspective of cost, the theoretical cost of China's imported pulp in 2024 may decline. With the promotion of the integration process of pulp and paper, the dependence of Chinese wood pulp import is expected to decrease. However, due to the limited improvement of supply and demand imbalance of wood pulp in China, the pressure operation of imported wood pulp may be external, which is good for the improvement of the profit of China's paper industry, but the bottom price support of China's imported wood pulp is reduced.

 From the point of view of mentality, the industry on the Shanghai Futures Exchange later trend is still different. Shanghai Futures Exchange pulp futures main contract price fluctuations on the spot market mentality impact is more obvious. The strength of the linkage of the current market changes, the futures price fluctuation in the short period affects the mentality of the spot market, and the mentality of the spot market changes and then affects the futures disk.

From other aspects, the occurrence of sudden uncertainty factors and its butterfly effect cannot be underestimated. The sudden maintenance of foreign pulp plants, the change of sea shipping situation, the impact of sea freight and the change of the pattern of sea supply and demand on the outer plate and the mentality of the Chinese market, and the change of the shipping pattern on the global pulp and paper market will all affect the Chinese pulp market periodically.



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