PAPER PRICE RISES,PAPER PULP PRICE LOWER?
Recently, many paper companies have launched a wave of price increases, including a number of listed companies. Sun Paper, Huatai Paper, Yueyang Forestry Paper, etc. have announced price increases of various types of paper, with price increases as high as 200/ton.
As early as August this year, financial reports released by listed paper companies showed that profits of some paper companies had declined.
Previously, Lee & Man Paper (02314.HK) announced that its profit forecast for the first half of this year fell by approximately 58% year-on-year. Not only that, judging from the first-half performance forecasts released by many paper companies such as Shanying International (600567.SH) and Bohui Paper (600966.SH), their net profits in the first half of the year were all in the red.
In the first half of 2023, weak market demand caused the paper industry's prosperity to remain sluggish. Affected by this, paper companies performed poorly.
In October, with the arrival of the "Golden Nine and Silver Ten" peak season, major paper companies increased prices across the board. As price increases gradually came into effect, industry profits improved significantly.
An article from Zhuochuang Information stated that some domestic paper mills had raised the ex-factory price of cultural paper in a round at the beginning of this month, and the price increase at the corporate level ranged from 200/ton to 400/ton. According to analysis, although the overall market demand does not show significant growth in the short term, because the demand for cultural paper is more rigid than other paper types, the decline in inventory will also provide certain support for product prices.
However, the price of upstream raw material pulp has fallen. In early trading today, pulp futures fell 2.25% intraday, and as of 10 o'clock, they were reported at 5,828/ton, setting a new low in the past three months.
Downstream buyers are not very enthusiastic about entering the market.
Longzhong Information said that the trading atmosphere in the domestic pulp market was dull. Futures prices are weak and volatile, and industry players are in a wait-and-see mood. The current market trend is not clear, downstream buyers are not very enthusiastic about entering the market, and there are preferential profit concessions in some transactions. In terms of market supply, there is currently little pressure on companies to ship goods. Most of the production equipment is operating normally and some are shut down for maintenance. Downstream demand has been weak. Affected by the psychology of buying up but not down, new orders have been sluggish recently. It is expected that domestic pulp market prices will mostly fluctuate in the short term, and attention will be paid to the trend of imported spot prices.
Huarong Futures analysis believes that the increase in broadleaves supports the needleleaf trend, the cost support brought by short-term external price increases continues to rise, and the center of gravity of futures terminal market prices is higher month-on-month. From the fundamentals, the commodity trend is declining. The market is focusing on the performance of consumer terminals. The recovery of domestic commodity confidence is less than expected. The weakening of short-term commodity trends has dragged down the adjustment of pulp, and the market has fallen below the 6,000 support. However, judging from the performance of the downstream market, the price increase letter at the end of the year once again boosted market confidence. The low level of the market itself has relatively strong support logic.
According to Huarong Futures analysis, looking at the market outlook, the market's focus on spot prices has stabilized and strengthened due to the recovery in demand in the fourth quarter. Under the rising trend of arrival costs in the distant months, cost logic supports the stabilization and strengthening of the focus. Looking at spot performance, mainstream quotes have stopped falling year-on-year, Silver Star has stabilized at around 6,200, and Russian needles have remained flat at 5,750. Looking at the cost logic, the pulp import costs US$780, and the converted price is about 6,500. The year-on-year performance discount is relatively large. In the short term, pay attention to the performance of capital reduction, and in operation, pay attention to the performance of low support. Personal suggestion, for reference only.