The hottest global pulp market in 2001

The global pulp market in 2001 amid the wind and rain. I. the parabolic trajectory of the development of the global pulp market. Looking back on the changes of the international pulp market from 1999 to 2000, it is like entering a parabolic trajectory. At the beginning of 1999, the world commodity pulp market was affected by the global financial crisis in developing countries such as Southeast Asia, Brazil and Chile. The pulp market was depressed and the pulp price hovered at the bottom. However, in March of that year, the consumption of commodity pulp in some European countries stopped falling and rebounded. In the second quarter, the spot price of NBSK began to rise, and it remained in good condition even in the traditional off-season of the third quarter. From September of that year to February of 2000, NBSK rose to US $650 per ton due to the positive global economy and the tight supply of pulp. It rose to $680 per ton in May 2000. At that time, in North America/Scandinavia (norscan), the treasury stock of pulp production was only 1.07 million tons, the lowest in five years. Pulp became a hot commodity in the market. By the third quarter, NBSK prices rose again, and the European market price was $710 per ton; The Asian market price is US $per ton, and the pulp market has risen to the top of the parabola, which can be described as brilliant

however, entering the fourth quarter, the situation of commodity pulp market began to change: pulp producers continued to improve productivity for months, and the output increased significantly; The treasury stock of the five major pulp producers is gradually rising and can't stop; The price of paper products failed to rise synchronously with that of pulp. Coupled with the weakness of the paper market, Asian customers began to significantly reduce orders and sell stock pulp to the market, and the international pulp market began to enter the next channel

second, the pulp market continued to show a free fall trend in the first half of 2001

at the beginning of the new year 2001, the global economic recession represented by the United States began to envelop the world commodity pulp market in the shadow of pulp difficult to sell and price reduction. Although the price of NBSK in the European and American markets is still $710 per ton, the price of NBSK in Asia has declined. At the annual meeting of the world pulp and paper industry held in Montreal, Canada at the end of January, no clear decision was made on the price of pulp, but it was generally believed that the decline in pulp prices was inevitable. At the beginning of this year, the national treasury of the world's major pulp producers remained at a high level, reaching 1.972 million tons in January, an increase higher than the average of the previous 10 years. It broke the 2million ton mark in February. Although some large-scale pulp producers in Europe and the United States have repeatedly shut down and reduced production, they still cannot contain the rapid rise in inventory, and pulp prices cannot be divorced from the free fall track. Most customers feel that the pulp price is too high. Although the CIF quotation of NBSK shipped to Japan (the largest paper producer/consumer in Asia) in North America in January is still $720 per ton, many trading companies suggest that they have begun to give customers discounts in order to maintain market share

since February 9, some major pulp producers have announced that the price of NBSK has been reduced from $710 to $680 per ton. However, it should be noted that the running direction of the motor should be consistent with the direction indicated by the arrow on the pulley cover. Indonesia and Russia took the opportunity to mass produce cheap wood pulp and poured into the market. This is commonly referred to as the skid field. For example, the CIF quotation of cheap wood pulp shipped from Indonesia to Japan and South Korea (the largest paper consumer in Asia) is US dollars per ton (in large quantities) and US dollars respectively. South Korea imported 50000 tons in nearly a month, far higher than the previous monthly order of 20000 tons, resulting in the price reduction of pulp in Europe and the United States failed to significantly increase orders

the first quarter was originally the busiest season in the tradition of the pulp industry in Europe and the United States. However, there is no way for the pulp market to recover, and the pulp price has not yet fallen to the bottom of the parabola. The influx of cheap wood pulp into the market in Russia and Indonesia continued to strengthen, and Sihao did not stop production or reduce production. At this time, European and American pulp manufacturers can't stand loneliness, and they began to compete to reduce prices. On March 2, Swedish manufacturers such as Sodra cell canfonor, weyerhaeaer and TEMBEC lowered the NBSK price again from US $680 to US $650 per ton

at the beginning of April, Sodra company of Sweden announced that the price of NBSK fell to US $620 again, followed by weyerhaeaer company, which produces 2.3 million tons of pulp in North America, reduced NBSK by US $50 to US $600 per ton, in order to seize the market in the competition. Subsequently, Norske Skog, Canada, bawater, tember and other companies also abandoned the original plan to reduce to $620 per ton and changed it to $600. All these show that the pulp market cannot change its decline. The decline of inventory is not equal to the decline of demand. The decline of pulp prices in Europe and the United States is also not equal to the decline of cheap pulp in Russia, Indonesia and other countries. Nbhk's listing price is in vain, and the spot pulp price has fallen to the lowest point since 1996, but pulp users, especially Asian paper mills, are still only interested in cheap wood pulp from Russia and Indonesia

on May 18, two large Canadian producers were helpless and took the lead in announcing that the NBSK quotation would be reduced from $600 to $570 per ton. In fact, the bulk trading price of futures in the European market has been reduced to $450, which is close to the spot trading price. The CIF quotation for European and American shipments to the three largest buyers in Asia, Japan, South Korea and China, is US dollars, which has fallen again recently. London futures trading prices continued to fall, trading volume decreased, traders only hope to try to maintain at more than $400. As the sales of NBSK in Europe and the United States have been close to or lower than the production cost, it is difficult for manufacturers to reduce the price. The only thing they can do is to follow the market, and the pulp price will fall with inertia

III. many reasons why the pulp market cannot stop falling

caused such an embarrassing situation of pulp price reduction in the first half of 2001, of course, many factors are involved, but the main points can be summarized and analyzed

1. The world economy affects the global paper market

last month, the global economic recession represented by the United States directly caused the weakness of the world paper market. The first reflection is that the paper mill can't bear the rise in the price of pulp. The paper price can't keep pace with the sales price of pulp and low-cost carbon fiber in the manufacturing commodity market of carbon nexus factory, and the paper production is gradually declining, resulting in a substantial reduction in the demand for pulp and a high stock of pulp. In order to promote the stock pulp, European and American pulp manufacturers try their best to maintain their market share, adopt spot transaction prices and constantly increase the discount rate of business contracts. However, due to financial problems and meager profits, Russia, Indonesia, Brazil, Chile, Thailand and other countries have successively attracted the market with cheap wood pulp due to low-cost competition, which makes European and American pulp manufacturers in a dilemma. According to statistics, the output of cheap wood pulp in these countries does not account for a large proportion of the global total (Russia and Indonesia account for 15%), but in the current specific period (high inventory, unable to suppress production, flooding of pulp in the market, and the continuous decline of pulp price in vain...), cheap wood pulp has played a negative role in driving down the global pulp price, and also began to shake the foundation for Europe and the United States to control the global pulp price

2. The gap between the pulp price and the actual trading price makes the pulp price more unstable

from January to June 2001, NBSK's quotation fell successively: US $per ton; The CIF quotation for shipment to Asia falls level by level in US dollars per ton (some are also discounted by business contracts); The spot trading price is generally lower than the quoted price of US dollars/ton. For example, the quoted price in June is still US $570 per ton, while the US market is US dollars. The emergence of dual track prices not only publicly declares that the listed price exists in name only, but also promotes the weakness of the pulp market

according to the analysis of relevant experts, the gap between the current pulp price and the actual transaction price still makes it difficult for the pulp price to stop falling. It is still possible to continue to reduce the price in the third quarter of this year, and the probability of getting out of the trough in the fourth quarter is very low

3. Reducing production cannot form a global action

pulp price is closely related to the overall inventory. From the end of December 2000 to the end of May this year, the monthly inventory of the world's major pulp producing countries was significantly higher than that of the same period in previous years. Of course, the main reason is the weakness of the paper market and the reduction of demand, but the reduction of pulp production is not strong. Countries other than the main pulp producing countries, such as Russia, Indonesia and other low-cost producers, full load production has impacted the market, which can not be ignored

pulp business involves the whole world, and it can only be effective when the production reduction of pulp mills is changed from regional to global. Due to the rising price of pulp last year, the global pulp production continued to rise (an increase of 2million tons last year). Since this year, the five major pulp producing countries have repeatedly announced a reduction in production, but the reduction was not large, far less than the three production reductions in the previous six years (each lasting for 4 or 5 months, with a reduction of 20%). The reason is: when the pulp price fell from the peak and the sales profit was the most, it was of course hesitant to reduce production driven by profit. When the pulp price could not stop falling and European and American pulp mills began to seriously reduce production, there was an inertia process, and the effect could not be seen in the short term. At the same time, the production costs of pulp mills in various countries vary, especially in the southern hemisphere, where the focus of the pulp industry is gradually biased (the production capacity accounts for 25% of the world). Because its cost is much lower than that in the northern hemisphere, they still make profits when the pulp price declines, so they operate at a full rate

4. The market is distracted and cannot improve purchasing power

it is difficult for the stock of pulp producers to decline, while the stock of buyers has declined. According to the Convention, this should mean the beginning of purchase, which is a precursor to the stability or rise of pulp prices. However, this year, buyers are reluctant to purchase goods and maintain production with extremely low inventory, because (1) the pulp price crisis is not over yet; (2) Unwilling to be trapped by the continuous depreciation of the pulp price; (3) The weakness of the paper market is ignored by itself

as we all know, the largest user of the pulp market is the paper mill. Only the improvement of the situation of the paper mill is the key to redeem the plight of the pulp market. The decline of pulp inventory alone is still not the main way to reverse the situation of the pulp market

it is expected that a virtuous circle will not appear in the pulp market in the second half of 2001, but considering that summer is the traditional season for pulp mills to shut down for maintenance, the global pulp output will decline by a certain extent, and it is estimated that the contradiction between supply and demand in the pulp market will ease up in the fourth quarter of this year