Pulp Margins Dissolve in China

Spend Matters welcomes a guest post by Monika Sosnowska of Mintec.

Pulp prices have risen steadily over the past 6 months and look set to rise further in the coming months. Since the start of 2013, we have seen above inflationary increase across the globe, with prices rising by 4.3%, 4.0% and 5.4% in Europe, US and China respectively.

Pulp

Packaging demand typically increases in the first half of a calendar year as building and construction industries ramp up and seasonal crops are harvested and packaged. In addition to these standard factors, China has started an anti-dumping investigation into imported dissolving pulp, which is likely to put pressure on imported pulp.

Dissolving pulp is bleached pulp with high cellulose content. This special grade is mostly used in the textiles industry, particularly for viscose and rayon production. In February, China started an anti-dumping investigation into imported dissolving pulp. The investigation is expected to last for at least a year with the aim of examining the prices of pulp imported from Brazil, Canada and US, the major pulp exporters to China.

Domestic Chinese pulp suppliers claim to have lost about 3.5% market share in 2012 alone due to an apparent wave of cheap imports. The investigation is likely to constrain Chinese pulp imports and push up viscose and other textile prices, as well as impact global pulp prices.

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