【Wdoodoo Weekly Pulp Report】High Inventories, Falling Costs Cap Pulp Rebound

March 3, 2026, 3:57 PM

WDD-Global

Guide

Highlights at a glance

Pulp prices swung last week amid weak supply-demand dynamics, with softwood pulp falling to ~5,257 yuan/ton and hardwood pulp rising to ~4,578 yuan/ton. Post-holiday paper mill restarts were sluggish, dampening restocking appetite and reinforcing market caution. Softwood pulp faces persistent oversupply—global inventories hit a record ~50 days—and lower import costs (e.g., Silver Star now <5,600 yuan/ton) cap upside. Hardwood pulp saw a $20/ton price hike to $620/ton for Asia, but demand remains tepid. Downstream paper operating rates declined across grades, and port inventories surged to 2.4M tons—a historical high. With March’s peak season approaching and mills increasingly cutting production, prices are expected to range between 5,100–5,500 yuan/ton; buying on dips is advised.

Affected by weak supply and demand, pulp prices rallied and fell back last week. Softwood and hardwood pulp continued to diverge. The average spot price of softwood pulp was around 5,257 yuan per ton, down 13 yuan per ton from pre-holiday levels. The average spot price of hardwood pulp was 4,578 yuan per ton, up 48 yuan per ton from the previous period. After the holiday, paper mills resumed production at a relatively slow pace, with weak willingness to restock raw materials, and the market wait-and-see sentiment remained strong.

1. Intensified macro volatility and sharp fluctuations in risky assets

Geopolitical conflicts in the Middle East escalated over the weekend, with Iran beginning to block the Strait of Hormuz. The current intensity exceeds expectations, and short-term pushes on prices of precious metals, energy and chemical commodities are expected. Attention will be paid to the sustainability of the incident. Judging from various feedbacks, we currently lean toward a pulse-like upward market. Pulp is mainly affected indirectly, and we maintain the judgment of buying on dips.

2. Greater difficulty in softwood pulp destocking; weaker support from pulp import costs

Affected by formula adjustments and structural decline in demand, the oversupply of softwood pulp is expected to be hard to reverse. In January, global softwood pulp producers’ inventory days rebounded to around 50 days, a historical high, making destocking difficult.

Softwood pulp quotations were flat in February. Coupled with the rapid appreciation of the RMB recently, lower import costs are negative for the futures market. The latest import cost of Silver Star pulp is converted to within 5,600 yuan per ton. Since August, actual transaction prices of softwood pulp have been around 680 US dollars, equivalent to about 5,500 yuan per ton; it is difficult to break through this level due to risk-free hedging pressure.

Current market trading is dominated by futures and spot traders. Downstream paper mills have resumed work slowly, with cautious attitudes toward raw material inquiries. A significant upward move in softwood pulp may require more obvious production cuts and destocking by pulp mills.

Hardwood pulp performance is neutral. In March, Brazilian pulp mills announced a 20 US dollars per ton increase in hardwood pulp export prices to Asia to 620 US dollars per ton, equivalent to about 4,900 yuan per ton in import costs. After the holiday, spot traders have tight supply and clear intentions to support prices. However, downstream paper mills show weak restocking enthusiasm and little willingness to chase highs.

3. Further weakening of demand support

Operating rates of all downstream paper grades declined from pre-holiday levels: coated art paper down 7.93%, uncoated wood-free paper down 5.76%, white card paper down 0.67%, and tissue paper down 10.84%.

Amid weaker end-user orders, base paper prices lack upward momentum. Due to the slow resumption of production by paper mills after the holiday, raw material restocking intentions are modest, acceptance of high-priced goods is low, and market wait-and-see sentiment remains strong.

4. Seasonal rebound in port inventories

As of last week, inventories at major national ports stood at 2.4 million tons, up 220,000 tons from pre-holiday levels, hitting a high for the same period in history, weighing on futures and spot prices.

Overall, the resumption of finished paper production is slow, and pulp inventory pressure is high. Risk-free import hedging pressure is relatively concentrated above 5,500 yuan. However, with the approaching March peak paper-making season, most softwood pulp has fallen below cost prices and pulp mill production suspensions and cuts are frequent, limiting downside room. Prices are expected to fluctuate between 5,100 and 5,500 yuan after the holiday. Focus on demand recovery during the March peak season; lean toward long positions on corrections.

Loose Supply and Weak Demand, Pulp Market Waits for Post-Holiday Restocking

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【Wdoodoo Weekly Pulp Report】High Inventories, Falling Costs Cap Pulp Rebound