【Wdoodoo Weekly Paper Industry Report】Finished paper continues to deplete inventory, with attention to whether pulp prices will confirm a second bottom

This week, pulp prices saw minor consolidation. The average price of coniferous pulp was around 4,806 yuan/ton, down 27 yuan/ton month-on-month, while the average price of broadleaf pulp remained stable at 4,336 yuan/ton. Pulp mills faced frequent supply disruptions, but paper mills primarily focused on digesting finished paper inventory, leading to slow inventory reduction and continued low-range fluctuations.

1. Macro-level oversupply support.

Geopolitical risks in the Middle East have eased slightly recently, while U.S. nonfarm payrolls unexpectedly turned negative on Friday. The expectation for a September rate hike has declined, leading to a significant pullback in long-term U.S. Treasury yields, which has provided supportive momentum for commodities;

The Politburo meeting tends to leverage existing policies effectively, while incremental policies may be deployed to stabilize the economy if downward pressure intensifies.

2.Supply disruptions occur frequently.

According to customs data, the total pulp imports in July 2026 reached 2.73 million tons, down 6.4% month-on-month and 5.1% year-on-year, with cumulative imports totaling 21.191 million tons, marking a 1.2% year-on-year decline.

Recent financial reports indicate that the primary operations of global conifer pulp mills have generally entered a state of losses, with some conifer brands facing cash flow constraints. There has been an increase in mill shutdowns and production cuts, reducing supply pressure in the long term. Within the year, brands like Lion and Northwood permanently ceased operations, while others shifted production. The market speculates that more shutdowns and production cuts will emerge.

Wildfires in British Columbia, Canada, are escalating, potentially impacting the production and transportation efficiency of coniferous forests.

However, the pressure on softwood pulp mills to reduce inventory remains significant, with shipments to China showing no decline. Short-term market supply pressures remain unchanged, while supply reductions impact more remote segments.

The inventory pressure for hardwood pulp is currently not significant. However, with the addition of international production capacity by the end of the year and the low-price impact of domestic integrated forestry-pulp-paper production, there is no immediate concentrated restocking activity in the market.

3. The primary shipment consists of finished paper products, with no centralized replenishment yet

The off-season sentiment in the industrial chain persists. Finished paper orders show insufficient follow-up, with raw material suppliers actively reducing inventories. Traders are lowering prices to move goods, while paper mills see improved gross margins, leading to opportunistic purchases of raw materials at low points. There is a lack of centralized restocking momentum. As the peak season approaches, paper mills gradually raise prices, but the implementation remains moderate.

4. Monitor the progress of finished paper and pulp stock removal.

Current pulp inventory remains relatively high, with port and warehouse stocks further increasing last week, dampening market confidence.

However, the paper mill proactively reduces inventory before the peak season. If inventory reduction is effective in the third quarter, it will create some room for the fourth quarter.

Overall, news of supply disruptions at overseas pulp mills has increased, while domestic paper mills and pulp mills have followed up with price hikes. As the peak season approaches, low-cost pulp prices have stabilized. However, high port inventories and weak-season demand limit market enthusiasm, with paper mills and traders focusing on inventory reduction, dampening the positive impact of supply-side factors. In the short term, operations are expected to fluctuate around the core range of 4600-4900, with a focus on either waiting or trading within the range. Key areas to monitor include downstream stockpiling recovery, inventory reduction progress, and pulp mill maintenance activities.