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The Impact Of China's Pulp Futures Listing On The Paper Industry
- Dec 04, 2018 -

China is a country that produces and consumes paper products. The degree of marketization of the pulp industry is relatively high. However, in recent years, the price of pulp has fluctuated drastically, and the demand for safe havens has been strong.

 

In this regard, China's first pulp futures contract was listed on the Shanghai Futures Exchange today, which is also the 50th commodity futures variety in China's futures market.

 

Today, pulp futures are listed on the Shanghai Futures Exchange. Today, a total of six contracts are listed, with a benchmark price of 5,980/ton.

 

The subject of the pulp futures contract listed this time is bleached softwood pulp, which is mainly used for the production of printing culture paper, household paper, and high-grade wrapping paper.

 

Pulp is an important raw material for the paper industry, and it is also one of the 50 important production materials in the circulation field in China. It is in the upstream of the entire paper industry chain, and the price fluctuations are very intense.

 

Yao Guang, director of the Shanghai Futures Exchange: During July-December 2017, the price of pulp rose from 5,100/ton to 7,575/ton, and rose by 48% in five months.

 

It is understood that China's main sources of softwood pulp imports are Europe, Russia and North America. In 2017, 4.15 million tons of softwood pulp was imported from North America, accounting for about half of the total imports. In 2017, the production and consumption of various types of paper products in China ranked the top in the world, with output and consumption of 110 million tons respectively.

 

Due to the many factors affecting the price of pulp, related production, consumption and trading companies face huge operational risks.

 

As a country of production and consumption of paper products, China's import dependence on bleached kraft pulp is close to 100%. The industry believes that the listing of this futures product provides a hedging tool for hedging in China's paper industry.

 

Li Xiaoliang, chairman of Shandong Huatai Paper Co., Ltd.: Pulp futures lock down the price of hedging in the paper industry, but it still reduces the risk.

 

Up to now, China has listed 50 commodity futures varieties, covering agricultural and sideline products, metal products, energy products and other fields.

 

Fang Xinghai, Vice Chairman of the China Securities Regulatory Commission: Establishing China's pulp futures market objectively reflects the changes in supply and demand in China's and global pulp markets, enhancing the international influence and voice of China's pulp and paper products, and guiding the steady and healthy development of the paper industry has important practical significance.


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