Pulp Price Situation Report

Currently the price of pulp has risen dramatically. Due to many factors which can be summarized as follows:

  1. Pulp prices were stagnating during the past two years.
  2. China waste paper regulations
  3. Logistics sluggishness and rising freight fee due to lack of containers. Pulp container usage is more than 50%.
  4. In China, softwood pulp has introduced into the futures market.
  5. Due to sluggish prices, the pulp mill has shut down for maintenance several times in order to improve the production.
  6. NKBP production in Canada decreases due to raw material shortages.

Actually, there are the other factors such as in China, pulp purchases are more than 30% of the world compared to other countries. Moreover, the recovery from COVID-19 is faster than in other countries. China also has a stronger purchase of pulp than other countries.  Additionally, since last year, softwood pulp has been introduced in the Shanghai futures market which has become a huge factor in determining the purchasing guidelines for Chinese buyers.

Another major factor is the future prices. It has increased sharply since around December 2020 and is still in the high price range until now. Furthermore, as prices increase becoming a trend, Chinese traders increase the price of inventories in order to make profits. While users’ prices keep going higher, we are entering a spiral where the price rises up further in order to increase the order quantity in front. The 100th anniversary event of the Chinese Communist Party scheduled for July 2021; we expect this situation to continue for some time. It is resulting in the recycled pulp price has increased, prices of paper products have increased. Demand for used paper has also increased. In the last two weeks, pulp prices have risen also; NBKP prices increase by 120 USD and LBKP prices increase by 50 USD.

Moreover, at the end of January, it has been reported that the future price of softwood in March, April and May is around 900 USD/MT. It means the pulp price keeps going strong.

If you are interested in pulp and paper products, please do not hesitate to contact us via sales@daiwashiryotrading.com for more information.