Wood pulp prices in China show mixed trends in July

Wood pulp prices in China show mixed trends in July; it is unlikely to be possible to determine a clear direction in the short term

    According to the SunSirs analytical system, the wood pulp market in July was characterized by the dynamics of "strong expectations versus weak reality": softwood pulp prices have fluctuated repeatedly, while hardwood pulp prices have continuously and gradually declined. The confrontation between optimistic long-term supply expectations and the pessimistic reality of high off-season inventories does not allow the market to determine a clear direction in the short term.

Price dynamics in July

    According to SunSirs, as of July 30, 2026:

    Softwood pulp prices are showing moderate growth amid expectations of a reduction in supply. Prices for hardwood pulp, on the contrary, continue to decline under pressure from high inventories and weak demand.

Suggestion: multidirectional signals

- Softwood pulp (optimistic expectations):

•     In July, a foreign manufacturer announced the closure of a softwood pulp mill (completion is scheduled for the end of 2026), which created expectations of a reduction in supply in the medium and long term.
•     Taking advantage of this, Arauco has increased its foreign quotations for Arauco Star softwood pulp, reflecting the growing desire of foreign manufacturers to support prices.
•     In addition, long-standing restrictions on logging quotas in British Columbia, Canada, combined with disruptions caused by wildfires, have raised market concerns about a potential decline in future softwood pulp shipments in North America.

- Deciduous cellulose (bearish factors):

•     Foreign quotations for hardwood pulp were lowered in July as foreign producers actively lowered prices to sell off stocks.
•     There are no plans for large-scale maintenance or capacity closures in the world. On the contrary, the commissioning of new facilities continues.
•     Stable production of hardwood pulp within the framework of integrated projects (timber processing + pulp production) is increasingly replacing imports, which puts additional pressure on prices.

Port stocks: tall and slowly contracting

    In July, port stocks remained high and the pace of their decline was slow.

    Stocks have moved from accumulation to a slight reduction, but the rate of decline remains extremely slow, indicating continued oversupply in the market.

Demand: the traditional decline in July

    July is traditionally a period of recession for the paper industry, and demand remains a key factor holding back the recovery in pulp prices.

Printing paper:

•     - Demand remained sluggish.
•     - Only a small volume of orders for the autumn tenders for the publishing industry was completed.
•     - Paper mills faced high stocks of finished products and continued to reduce production capacity.
•     - Purchases of raw materials are limited only to the most necessary needs.

White cardboard:

•     - Prices have shown relative stability due to stable demand in the packaging sector and high production capacity.
•     - However, the sluggish volume of orders from subsequent packaging industries makes it difficult for paper mills to shift price increases to finished products or build up stocks of raw materials in advance.

The overall picture of the industry:

•     - Purchases are usually limited to urgent needs.
•     - Most factories are operating at break-even or loss levels with respect to the processing of finished paper, which does not allow them to compensate for the rising costs of pulp.
•  

Key Pulp market indicators (July 2026):

Futures market: Expectations swing

• - Early July: The main contract fluctuated at low levels amid a strong wait-and-see mood in the market.
• - Mid-July: News of the closure of overseas pulp mills attracted optimistic investors, quickly pushing prices to the 4,900 level as the market priced in expectations of a future supply reduction.
• - End of July: funds recorded profits after these expectations materialized. Market dynamics returned to the reality of high inventories and weak demand, which led to lower prices and limited the sustainability of any recovery.
•  

Futures data (July 30):

SunSirs analysts' Forecast

    SunSirs analysts believe that the July situation in the wood pulp market was characterized by a confrontation between optimistic long-term supply expectations and the pessimistic reality of high off-season inventories.

Key findings:

1. - Optimistic supply-side factors emerged too late to quickly ease pressure on the spot market. The closure of one plant cannot change the overall picture of oversupply.
2. - Demand remained in the traditional off-season decline. Factories limited purchases to only necessary goods, without creating an additional impetus for price increases.
3. - Softwood pulp prices fluctuated in a certain range, supported by expectations of a reduction in supply, but lacking the strength for sustained growth.
4. - Prices for hardwood pulp had a slight downward trend, as new capacities and import substitution continue to exert pressure.
5. - Expectations regarding supply and demand are unlikely to undergo significant adjustments until the stock accumulation period approaches the peak season in September.

Short-term forecast

    It will be difficult for wood pulp prices to establish a clear one-sided trend in the short term.

•     - The market will remain in the range of fluctuations.
•     - Price recovery is possible only with a simultaneous reduction in port stocks and an increase in demand from paper mills.
•     - The key period for monitoring is September—October, when the accumulation of stocks traditionally begins for the peak season.

Importance for market participants

1. - For pulp producers: It is necessary to closely monitor the dynamics of port stocks and demand from paper mills. High inventories limit the opportunities for price increases.
2. - For paper mills: The current low pulp prices are an opportunity to replenish stocks at favorable prices. However, the low marginality of finished products limits purchasing budgets.
3. - For traders: The volatility of the futures market creates opportunities for short-term speculation, but fundamental factors (stocks, demand) remain crucial for long-term positions.
4. - For investors: You should pay attention to September–October, when the peak of the seasonal recession may be replaced by a revival in demand and a price correction.

Tags: #China #woodcellulose market #coniferous cellulose #larch cellulose #prices #port stocks #demand #futures #SunSirs