The first show of the hottest pulp futures fell 17

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The "first show" of pulp futures failed: it fell 17% in five days.

since its listing on November 27, the pulp futures of Shanghai Futures Exchange has continued to fall. The main 1906 contract was licensed from the benchmark price of 5980/ton and closed at the limit on the same day. By December 3, the price had fallen below the 5100/ton mark. It is rare for newly listed futures varieties to fall so heavily. Investors are concerned that whether pulp futures can replicate the miracle of "falling first and rising later" of Apple futures

On November 27, after nearly six years of preparation, China's 50th Commodity Futures - pulp futures was listed on the Shanghai Futures Exchange. According to the announcement made by the exchange in the last period, there are 6 pulp futures contracts involved in trading, namely sp1906, sp1907, sp1908, sp1909, sp1910 and sp1911. The trade variety is bleached kraft softwood pulp, and the benchmark price of contract listing provides the industry with more development opportunities of 5980/ton

in terms of the first day's performance, pulp futures did not have a "good start" as expected. Instead, they fell in shock, and nearly fell by the full limit at the close. Not only that, in the following trading days, the transformation and upgrading of pulp stage chemical industry continued to "fall" with the improvement of refinement and processing depth. As of yesterday, the main 1906 contract was reported at 4978/ton, a drop of 17% compared with the benchmark price

according to the insiders, the fundamental reason for the malaise of pulp futures lies in the continued downward fundamental pressure. Gold securities learned that due to the excessive increase of domestic pulp price in 2017, a large number of overseas pulp poured into China, resulting in high port pulp inventory, and the bonded area was nearly full. In addition, the industry demand remained sluggish. Affected by Sino US trade frictions and domestic macroeconomic downturn, the cumulative output of machine-made paper and paperboard in 2018 fell by 1.7% year-on-year. The production and sales of the paper mill were not smooth, and the enthusiasm for wood pulp procurement demand was significantly weaker than in previous years. It is worth mentioning that the futures prices of domestic industrial products have fallen continuously recently, with strong market pessimism, which has also suppressed the future price of pulp

cost enterprises benefit

pulp is an important raw material for the paper industry. China consumes more than 100million tons of pulp every year and is the world's largest net importer of wood pulp. "Although the futures price is weak at present, it provides an obvious investment strategy for the market: avoid wood pulp production enterprises and lay out wood pulp cost enterprises." Shenzhen futures people contacted by golden Securities pointed out

it is understood that at present, the import dependence of domestic bleached needle pulp is even close to 100%, and the pricing power of pulp is basically controlled by upstream foreign pulp mills. In recent years, pulp prices have been high, pulp mills have obtained excess profits from the industrial chain, while futures pricing helps to promote the balanced distribution of profits in the industrial chain. Domestic futures prices guide the rationalization of spot price pricing, which in turn affects the external pulp prices and promotes domestic enterprises to compete for pulp pricing power. At the same time, with the launch of futures instruments, paper enterprises can use futures to manage the price risk of raw materials, effectively lock in production costs and profits through hedging, and pulp traders can manage inventory and avoid the risk of pulp price decline through hedging

for example, on November 27, pulp was listed, and the closing price of sp1906 on Friday night was 5046/ton, while the price of black needle in Jiangsu, Zhejiang and Shanghai was 5900/ton. This also means that the wood pulp cost enterprises are expected to make full and reasonable use of bleached needle pulp futures to hedge their raw material end and lock up the cost and increase the gross profit margin due to upside down. It is no wonder that in the context of the sharp decline of pulp futures, many researchers from securities companies have recommended A-share household paper enterprises, believing that they are expected to benefit from the market situation of declining raw material prices and expand profit space

It is worth mentioning that the latest research report of Guosheng securities points out that the rise and fall of newly listed futures are easily controlled by emotions, and pulp futures continue to decline. It is too early to judge how to go about the future spot fundamentals. On the contrary, the broker believes that the spot price of pulp will pick up from the second quarter of 2019. Shenwan Hongyuan also believes that the supply and demand of coniferous pulp and broad-leaved pulp will continue to be in tight balance in 2019, and it is expected that the downward range of pulp price will be limited

in the short term, considering that the current futures price has been discounted to the spot price of more than 1000/ton, and the current price is close to the normal price of coniferous pulp after 2013, there will be sparks between the brush and the commutator in the process of DC electromechanical operation, because investors should be cautious to short

"gold securities" also noted that many investors speculated that the pulp futures would become the second apple futures, and then a V-shaped reversal? In the view of insiders, this is not realistic. After all, the supply side of Apple mainly comes from China and does not need to be imported. The composition of the price is also relatively simple, with few immutable factors. In terms of price influencing factors and price composition, it is quite difficult for pulp futures to get out of Apple's soaring market in the future

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