Bleached softwood and hardwood kraft pulp prices had shifted recently according to RISI reports.
This prompted a look into a recovered paper to pulp market analysis with the graph you see below. There are a few important things to bear in mind about this graph.
- Pulp prices are generally reported in price per tonne (metric) and high enough that, by keeping the units the same, the price curves flatten out.
- Because of this difference, the pulp prices (which track more closely together) are actually in between the relative price differences of OCC-11 and SRPN-56. I’ve chosen these two RP grades for more robust pricing shift analysis.
- The lines are color-coded with the RP price/ton range on the left and the pulp price/tonne range on the right. If you need a clearer graph or explanation, please contact Paper Division Liaison, Bernie Lee.
The chart shows that the announced import ban may have had a suppressing effect on SRPN and other news and mixed grades. OCC prices tracked with pulp prices until recently, around the time when the import ban implementation was more definitely announced. However, unless new import licenses begin issuing, there appears to be a chokepoint in the pipeline for recovered paper imports under HTS codes outside of the 4707900000 category. PIERS/JOC data shows that a significant portion of imports under that code were not mixed paper grades. So while a tariff-rate quota is not in effect, this regulatory chokepoint will have a greater price shifting effect on Chinese consumers than foreign exporters.
For more information or to help discuss bale categorization, please contact Bernie Lee