The center of gravity of pulp price has moved down. Is this wave of callback "diving" or peaking

Since November 2020, the pulp futures contract has fluctuated upward all the way, constantly breaking through the previous high point and stepping out of the unilateral rising market with an increase of up to 70%. The index is up to 7628, which is the high point since listing. The monthly line has closed positive in April and increased by more than 10% for three consecutive months, with eye-catching market performance; The main 05 contract reached 7652, an increase of about 64%.

However, last Tuesday (March 2), the pulp futures price reversed the direction and started to fall, closing down 3.10% on the day, which is the largest one-day decline in the near future. The market sentiment has collapsed, and the focus of pulp price has moved down compared with the early stage. Whether the callback is a "diving" or peaking, we still need to pay attention to the driving factors of fundamentals.

01

Pulp prices rose to an all-time high

At the end of May 2020, the quotation of outer pulp stopped falling, and the price rose slowly in September. At present, the quotation of Chilean Arauco coniferous pulp at the main port of China is US $900 / ton, that of broad-leaved pulp at US $730 / ton, that of Russian Ilim group coniferous pulp at US $880 / ton, and that of Brazilian parrot broad-leaved pulp at US $720 / ton; The outer disk quotation of coniferous pulp and broad-leaved pulp continued to rise, up $200 / ton compared with the price at the beginning of the year.

In the domestic Shandong market, the quotation of Arauco coniferous pulp is 7325 yuan / ton, and the quotation of broad-leaved pulp is 6050 yuan / ton; The price of Canadian kailipu coniferous pulp in Guangdong market is 7450 yuan / ton; The market price also rebounded, with the price rising by 1850 yuan / ton compared with the beginning of the year.

At present, the internal and external quotation of pulp has reached the high price range in recent years. Whether the implementation of "waste prohibition order" and "solid prohibition order" can support the long-term high price still needs to be verified by consumer data.

02

Inventory increased month on month, still at a low level in recent two years

China's Bleached needle pulp is mainly imported. In January and February, the pulp inventory of Qingdao port was 921 thousand tons and 1062 tons respectively, and the cumulative inventory of domestic ports in January and February was 1740 and 1977 thousand tons respectively. During the Spring Festival, the spot transaction was cold and the inventory increased. The inventory of Qingdao port in February decreased by 12.9% compared with the same period last year, 12.3% less than the same period in 2019, but much higher than the 700 kiloton inventory in the years before 2018. In February, the domestic port inventory totaled 1977 thousand tons, a year-on-year decrease of 13.7%. Compared with December and January, the inventory increased, but the overall inventory is still at a low level in the same period in recent two years.

03

Start up and consumption of downstream paper products

1. Both paper prices and operating rates picked up

With the increase of pulp price, the price of finished paper has warmed up from June 2020, and downstream paper enterprises have issued price increase letters in turn. The prices of cultural paper, packaging paper and household paper have increased, and white cardboard has taken the lead in increasing, with the largest increase. At the beginning of March, the paper mill raised the price again, including Chenming Paper Shandong and Zhanjiang bases, Shandong and Jiangsu bases of Bohui group, Henan Xinxiang Xinya paper, Wanguo paper and white cardboard price by 1000 yuan / ton, Guangxi Jingui paper price by 1800 yuan / ton. After this increase, the spot price of white cardboard is close to 10000 yuan / ton, and the price of some enterprises exceeds 10000 yuan. According to the data, as of March 5, the daily average price of Chinese white cardboard was 9410.71 yuan / ton, the daily average price of double offset paper was 7262.5 yuan / ton, and the daily average price of double copper paper was 7280 yuan / ton. It can be seen that the paper prices have rebounded to a high level.

The operating rate reflects the consumption of pulp. The operating rate of domestic paper in January was 75.45%; The operating load rate of white cardboard in January was 76.85%; The operating load rate of double offset paper in January was 65.88%; The monthly operating load rate of double copper paper is 65.91%. Due to the Spring Festival holiday in February, the operating load of downstream double offset paper and household paper decreased, and double copper paper and white cardboard continued to rise. The high price of paper products has enhanced the driving force of downstream operation. It is expected that the operating load rate of paper mills will rise as a whole in March.

2. The output of paper products increased steadily and the social inventory was at a medium high level

With the increase of paper prices, the profits of paper mills have improved, the operating load has increased, and the output of paper products has rebounded. The output of household paper rebounded steadily, reaching 1068000 tons in January, and fell in February, but still higher than that in the same period in previous years; In February, the output of white cardboard was 797.2 thousand tons, rising steadily; Due to the impact of the Spring Festival holiday, the output of whiteboard paper, double offset paper and double copper paper decreased in February. It is expected that in March, with the provision of operating load, the output will continue to pick up in the later stage.

Inventory: the data show that in February, the social inventory of five types of paper products (white cardboard, double offset paper, double copper paper, household paper and whiteboard) was 5840 kilotons, with a month on month increase of 5.6% and a year-on-year increase of 16%, close to the 5995 kilotons of inventory peak in April 2020. If the end consumption is not reached in the later stage, the pressure on paper inventory may appear.

On the whole, the pulp price continues to rise and has risen to an all-time high. Due to the rise of pulp price, the market sales are good and the port inventory is low; Downstream consumer side: the operating load rate of the paper mill decreased slightly in February, which is expected to increase in March, which will lead to the recovery of paper production. However, the social inventory of paper products rebounded in February. If the final consumption is less than that in the later stage, the inventory pressure may be fed back to the price.

On the disk: with the improvement of pulp price, the futures price has continuously reached a new high since listing. The pulp futures 05 contract has reached 7652, an increase of 64%. There is great pressure for correction in the short term. The actual consumption of the terminal after the implementation of the "waste prohibition order" and "solid prohibition order" is still the focus of attention on whether the high price of pulp can be sustained.