Pulp futures traded more than 40 billion in the next day, ranking 6th in the rankings!

The next day's trading volume of pulp futures is approaching Shanghai copper, ranking sixth in the ranking.

Oriental Fortune Network on November 28th, domestic commodity futures rose most in the afternoon, energy and chemical futures rose significantly, polypropylene, methanol, asphalt main contract rose the top, in addition, it is worth noting that the pulp futures listed the next day active trading The degree went up again. As of midday, the cumulative turnover exceeded 830,000 contracts, with a turnover of more than 40 billion, second only to Shanghai Copper Futures, ranking sixth in the volume ranking.

Institutional comments: high inventory + low demand stack, futures market sentiment

Port stock highs + continued low downstream demand caused fundamental downward pressure.

1) Port inventory high: According to Zhuo Chuang information data, Qingdao, Changshu and Baoding stocks are all at high levels. As of the end of October, Qingdao Port's total stock of wood pulp was 850,000 tons, up 34.9% from the previous month and up 136.1% year-on-year; Changshu Port The total inventory of wood pulp was 470,000 tons, a decrease of 7.8% from the previous month and an increase of 126.0% from the same period of last year. The stock of wood pulp in Baoding area was 90,000 tons, an increase of 23.3% from the previous month and an increase of 233.3% from the same period last year. Stocks in November may increase further.

2) Demand continued to be sluggish: The cumulative production of mechanical paper and paperboard in January-October 2018 decreased by 1.7% year-on-year. The production and sales of paper mills were not smooth, and the enthusiasm for the demand for wood pulp procurement was significantly weaker than in previous years. The downstream raw paper trading was light, which caused some domestic paper and cultural paper manufacturers to stop maintenance. The paper mills were not in good condition. The paper mills and the original paper distributors were in the inventory digesting stage, and the high stocks further weakened the paper mill's demand for wood pulp.

The recent decline in commodity futures has brought about emotional sentiment. Affected by the downward pressure on the macro economy, domestic industrial product futures prices have continued to fall in the recent past, and the pessimism of futures is strong, which also suppresses the price of pulp. The main contracts of the 47 varieties of the three domestic commodity exchanges, except for the strong wheat 1901 rose slightly by 0.3%, the rest only fell in different degrees, the main contract of 13 varieties fell more than 10%. Pulp futures listed in the commodity futures market sentiment low, emotional impact caused the pulp futures prices to fall.

In 2019, the supply and demand of softwood and broadleaf pulp continued to be tightly balanced, and the downward trend of pulp prices is expected to be limited. According to the PPPC data, although some new wood pulp projects will be produced in the next five years, some coniferous pulp and broadleaf pulp projects will be converted into dissolving pulp. PPPC expects a net increase of 3 million tons of broadleaf pulp in 2017-2022. The annual average compound growth rate is about 2%; the softening capacity of softwood pulp is 1.2 million tons, and the average annual compound growth rate is about 1%. At the same time, the World Bank expects that the global economic growth rate will maintain a steady growth of around 3% in the next three years. The world's pulp and paper paper, household paper, white cardboard and other new papermaking projects are put into production to increase pulp demand. The operating rate of the industry will remain high. The weak balance of the industry supply and demand structure ensures that the downward trend of pulp prices is limited.

Futures promote the transparency of pulp pricing, which is conducive to establishing the right to speak in the domestic pulp trade; increasing the diversity of paper mill risk management tools. The dependence of domestic bleaching needle pulp import is even close to 100%. The pricing power of pulp is basically controlled by upstream and foreign pulp mills. At present, overseas softwood pulp CR16 is 66%, hardwood pulp CR1072%, and overseas leading price pricing is higher. In recent years, the price of pulp has been high, and the pulp mill has obtained excessive profits in the industrial chain. Futures pricing helps to promote the balanced distribution of profits in the industrial chain. Domestic futures prices guide the rationalization of spot price pricing, which in turn affects the external disk price and promotes domestic enterprises to compete for pulp pricing power. At the same time, with the introduction of futures instruments, paper companies can use futures to manage the price risk of raw materials, and effectively lock production costs and profits through hedging. Pulp traders can manage inventory by hedging and avoid the risk of falling pulp prices.

Responsible editor: Ge

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