The hottest pulp futures bring new opportunities i

2022-08-23
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Pulp futures bring new opportunities to the industrial chain

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core tip: since the first trading day after the festival on February 3, the disk logic of pulp futures has been carried out around the epidemic. During the Spring Festival, most domestic paper enterprises maintained normal operation, and some enterprises shut down. Pessimism accumulated, and the post holiday opening pulp was close to the limit, breaking the new low since the listing. The day's bad mood was exhausted, and the disk was repaired upward. With the domestic epidemic effectively controlled, pulp continued to rebound. Suspended enterprises have resumed work one after another, but due to the slow recovery of logistics, the replenishment of raw materials, the transportation of base paper and finished products are blocked, and the port inventory continues to accumulate. Then, due to the full outbreak of the epidemic and the collapse of crude oil, market panic spread again, and pulp futures oscillated sideways

since the first trading day after the festival on February 3, the disk logic of pulp futures has been carried out around the epidemic. During the Spring Festival, most domestic paper enterprises maintained normal operation, and some enterprises shut down. Pessimism accumulated, and the post holiday opening pulp was close to the limit, breaking the new low since the listing. The day's bad mood was exhausted, and the disk was repaired upward. With the domestic epidemic effectively controlled, pulp continued to rebound. Suspended enterprises have resumed work one after another, but due to the slow recovery of logistics, the replenishment of raw materials, the transportation of base paper and finished products are blocked, and the port inventory continues to accumulate. Then, due to the full outbreak of the epidemic and the collapse of crude oil, market panic spread again, and pulp futures oscillated sideways

the potential macro benefits cannot be ignored

combing the market performance of pulp futures since its listing can be basically divided into two stages: the first stage, from its listing to the end of June last year. On the eve of the listing, the external quotation of pulp was high and sideways for several months, the profits of downstream paper enterprises were severely squeezed, and the market was facing a situation of high inventory and weak demand. After the listing of pulp futures, the disk fell rapidly, and the downward cycle of pulp price was also shortened by (1) expanded benzene board insulation materials. In the second stage, since the beginning of July last year, pulp futures have been consolidated at the bottom for nearly nine months. The internal and external price differences have been slowly repaired, the profits of paper enterprises have begun to improve, and all links of the industrial chain have actively digested inventory

since December last year, macroeconomic expectations in the first quarter have continued to improve, not only in the pulp market, but also in the whole commodity market. In the context of the expected phased stabilization of the economy in the first quarter, with the signing of the first phase agreement between China and the United States, the Australian fire, the first two batches of imported waste paper quotas and other events, the disk continued to rebound until the epidemic interrupted the rebound rhythm. The epidemic not only pushed back the time of pulp rebound, but also reduced the expectation of pulp rebound height. The market waited for substantial positive results to bring new logical changes to pulp

in terms of supply, since the second half of last year, all links of the industrial chain have taken the initiative to destock, and the inventory of global producers fell to the level before the accumulation of inventory in the fourth quarter of 2018, and the pulp inventory in the main port of China also fell significantly in the fourth quarter. Due to the concentration of pulp in Hong Kong and the stoppage of domestic logistics during the epidemic, the pulp inventory in the main domestic port continued to accumulate in February. Although the pulp inventory decreased in the middle of this month compared with the first ten days, the decline was limited. Considering the recent impact of the epidemic on wood pulp shipping in some areas, the arrival volume will be significantly reduced in the coming months

in terms of demand, the epidemic has affected the current market demand, the demand for household paper has benefited in the short term, the demand for cultural paper has been delayed, and the demand for packaging paper has been suppressed. With the resumption of work and production in various regions, the logistics recovery, and the concentrated release of pent up consumption in the early stage, spring itself is the peak season for paper, and the printing of teaching materials, publishing bidding and the promotion of household paper on women's day will bring support for paper demand. However, judging from the current overseas epidemic situation, it is difficult for the demand to substantially improve in the first half of the year, and the demand will be released intensively or in the second half of the year. This is because, on the one hand, this year marks the 100th anniversary of the founding of the party, and there is support for the demand for cultural paper. On the other hand, the plastic ban has led to an increase in the replacement demand for wrapping paper, and there is a potential growth in high-end wrapping paper with wood pulp as raw material. At the same time, using biological methods to prepare poly amino acids with special structure and controllable relative molecular mass is a promising technology. We should also pay attention to the shortage of fiber raw materials caused by the waste ban in the second half of the year

in the short term, the epidemic has led to increased demand uncertainty, while some wood pulp shipments have been affected. Optimistic about the demand in March, although the strength will be limited, but the macro potential positive factors cannot be ignored. It is expected that pulp will continue to oscillate weakly between strong macro expectations, weak fundamentals and epidemic control

pulp mills have a strong willingness to support prices.

in the long run, the bottoming of the pulp industry is still in progress. In 2020, there will be less new capacity of global chemical pulp, and the future capacity growth will be stable. At the same time, the end consumption is at the bottom, the demand is still resilient, and the downward space of pulp price is limited. With the increase of stable growth policy, the future trend of pulp price is expected. It is suggested to wait for the demand logic to be fulfilled in the second half of the year, and continue to pay attention to the supply side of wood pulp and the fiber raw material side

the bottom of pulp futures has been consolidated for nearly nine months. The pulp price has bottomed out and stabilized, and the downward space of the disk is limited. The rebound expectation of the market for pulp futures has become increasingly strong, and new changes have taken place in the trade form and risk management of the upstream and downstream of the pulp industry chain. China's Bleached needle pulp has long relied on imports. At the initial stage of the pulp market, the industrial customers are mainly trade customers. Enterprises use pulp futures to hedge and lock in profits. When enterprises complete the purchase, they establish empty orders to protect the spot inventory or in transit inventory, reduce the operation and management risks, and improve the competitiveness of enterprises. With the gradual enrichment of market participants, pulp futures innovated the pulp pricing model, and the new point price trading model began to be widely promoted in spot trade

for traders, the compressive strength of materials in different industries is different. In addition to spot inventory and in transit inventory management, will the future purchase test machines be the same? Planning management is also the core of traders' risk management. Considering the strong willingness of pulp mills to support the price, the enterprise calculates the contract warehouse receipt cost in the near and far months, uses futures to establish multiple orders to supplement the long-term inventory, and locks in the future pulp purchase cost

similarly, paper enterprises have gradually participated in the pulp futures market. Under the current situation that the downward space of pulp price is limited and the rise is expected, paper enterprises have also begun to consider using futures to control the forward pulp purchase cost and smooth the market risk caused by the fluctuation of spot price. In the future, if paper related futures are listed, paper enterprises can also carry out cross species arbitrage to lock in paper production profits

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