If the pulp futures fall too much, can it rebound against the market?
Source: Central Financial News Network
Pulp futures have fallen sharply since the listing. At present, the main contract price is 4978/ton, which is 5800/ton compared with the mainstream silver star in the spot market, and the discount rate reaches 822/ton. From a fundamental point of view, the pressure above the pulp price is greater, but the excessive basis will inhibit the downside.
Commodity market was suppressed
Recently, Fed Chairman Powell published a clear dove-speaking statement. This statement reflects the fact that a series of macro data from the United States is weak, which makes Fed officials gradually recognize the fact that the US economic cycle is slowing down.
Domestically, retail sales growth declined sharply in October, and infrastructure investment rebounded. However, the leading indicators of real estate and manufacturing investment showed that the subsequent investment pressure was relatively high. The growth of monetary and social financing was significantly lower than expected, CPI was flat and PPI was down. In November, the manufacturing PMI index was 50, down 0.2 percentage points from October, hitting a 28-month low.
The recent economic data is weak and has been expected in the market for a long time. With the pessimistic economic data repeatedly verified, the bulk commodity market as a whole is still running empty.
Paper industry chain is in trouble
This year, the downstream paper industry chain is in trouble, and the production of mechanical paper and paperboard in China is significantly lower than the past two years. As of October, the production of mechanical paper and paperboard in China was 97.353 million tons, a decrease of 9.5% compared with last year. Among them, cultural paper and news paper fell sharply. Significant declines in demand have led to a significant increase in pulp stocks. At present, China's three major pulp stocks Baoding, Qingdao and Changshu's inventory are in a very high position, the total inventory of the three places totaled 1.41 million tons, an increase of 815,000 tons from last year's 595,000 tons, an increase of 137%. From a global perspective, wood pulp stocks are also accumulating, and the stocks of wood pulp in several major ports around the world have reached a new high since 2013.
At the same time, in November, under the pattern of sluggish demand in the domestic spot pulp market, all kinds of imported pulp external discs showed a downward trend, and downstream paper mills traded companies had insufficient power to take over. The net price of coniferous pulp has fallen, ranging from 30 to 60 US dollars per ton. The price of the inner plate fell more, the bleached wood pulp was under pressure, and the whole volume of the softwood pulp and broadleaf pulp fell 600-700/ton.
The pulp spot market is unlikely to change in the short term and will continue to decline. However, due to the current close to 800 basis, we need to carefully evaluate the trend of futures prices. In the long run, the spot price volatility of the pulp is too small. This can be seen from the Shanghai Futures Exchange's price limit and minimum margin ratio for pulp futures. Under normal circumstances, pulp futures have an upside limit of 3% and a minimum margin level of 4%, which is the lowest level of all listed commodities, which means that the fluctuation of pulp in the long-term is among all listed commodities. The smallest class. The discount on the futures market is the extent to which the market believes that the forward price is lower than the current one. Under the background of weak macro atmosphere, the industrial products of the whole market have certain discounts, but mainly concentrated in the black and chemical markets, generally ranging from 10% to 15%. Pulp futures, which are relatively small in relative volatility, are currently around 15% discounted. This is not appropriate.
Therefore, the author believes that although the fundamentals of the pulp market are poor, the spot market may continue to languish, but the over-supply demand for futures is repaired, and the futures price is expected to stop or rebound slightly, repairing the excessive basis.
Editor in charge: Zheng Shengfang
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