As of early May, the domestic dissolved pulp market showed a stable, moderate, and weak trend in the second quarter. The external price of dissolved pulp has dropped by about $20/ton compared to April, but the domestic dissolved pulp price is supported by factors such as downstream price rebound and domestic supply reduction, making the price relatively stable. The demand or volume in the future is limited, but there are unstable factors in the supply side, and the dissolved pulp market may continue to remain stagnant.

According to data monitoring by Zhuochuang Information, as of May 15th, the domestic price of broadleaf dissolved pulp in the second quarter of 2023 remained at 7200-7300 yuan/ton, with specific details discussed uniformly. In terms of external pricing, the price of broadleaf soluble pulp is based on $900- $920//ton, while the price of needle leaf soluble pulp is based on $920- $925//ton, which is about $20//ton lower than the previous round of prices. It is expected that the price of dissolved slurry or horizontal consolidation operation will be carried out from May to June, with the following main influencing factors.

Need or maintain immediate follow-up

Recently, downstream viscose staple fiber enterprises have been fully promoting the delivery of early orders, with some shipments being tight, leading to a slight increase in prices and a positive attitude towards the pulp market. However, from the perspective of future market expectations, it has entered the off-season of the industry, and viscose short fiber enterprises are becoming cautious in their pulp procurement. The terminal cotton yarn factory will mainly focus on digesting raw material inventory, and there is currently no expectation of sustained improvement in terminal demand. Therefore, it is expected that the demand for viscose staple fiber enterprises to collect pulp may continue to be tepid, and there will be insufficient support for the price of dissolved pulp.

Domestic production tends to increase

The Shandong dissolution slurry maintenance device is planned to resume production by the end of May, and domestic production will increase appropriately; In addition, since 2023, the price of pulp making has been continuously decreasing. For joint production enterprises, the profit from producing dissolved pulp is better than that of pulp making at this stage. It is expected that Hunan's transfer of production enterprises in June may mainly focus on producing dissolved pulp. Therefore, it is expected that the domestic supply of dissolved slurry will tend to increase, but the proportion of domestic production is relatively small, and the impact on prices is relatively limited.

Import sources may be slightly reduced

With the release of new production capacity in the early stage and the increase in international supply of dissolved pulp in 2023, the total import volume of dissolved pulp in China from January to March was 985500 tons, an increase of 14.46% compared to the same period in 2022. However, entering the second quarter, as domestic demand slows down and domestic supply is relatively sufficient, the enthusiasm of businesses to purchase external products has slightly slowed down. From the data of some producing countries exporting to China, it can be seen that there is a slight expected decrease in import volume from May to June. Among them, the dissolved slurry sent from Brazil to China in April was 50600 tons, a decrease of 67% compared to the previous month, which is a positive and supportive attitude. However, attention still needs to be paid to customs clearance and sea freight situation.