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How to treat dissolving pulp import reduction by 40% in Jun?

2020-07-31 08:50:11 CCFGroup

Dissolving pulp (H.S. code: 47020000) import of China totals 180.8kt in Jun, reducing 40.42% from May at 304kt and almost decreasing 50% from Apr at 356kt.

Chinese dissolving pulp mills are producing paper pulp on large quantity at present and downstream buyers express worries over sharp decrease of dissolving pulp import volume.

It can be seen that the import from Indonesia, Brazil and South Africa decreases notably as the reduction of Indonesia and Brazil has reached 109kt. The import from other origins generally keeps normal fluctuation. The total import of other 13 countries just decreases by 100 tons from May.



Dissolving pulp import of China in Jun, 2020 by origin

Origin Volume (kg) Value (USD) M-O-M change (kg)
Indonesia 33,955 21,595,447 -72,140
Brazil 24,906 20,007,336 -37,246
South Africa 16,981 10,850,319 -11,700
Czech 13,189 8,622,123 -6,986
Canada 4,713 3,839,261 -3,403
Portugal 4,491 2,825,674 -2,717
Japan 5,915 3,950,830 -2,481
Norway 494 647,772 -2,034
Germany 21 64,493 -42
Thailand 6,038 3,865,487 -1
France 204 299,372 204
Finland 10,800 6,743,751 1,310
Austria 12,684 8,723,083 3,180
Sweden 14,035 9,169,543 3,428
United States (US) 24,402 22,699,149 3,443
Laos 8,000 5,000,000 6,000
Total 180,828 128,903,640 -122,675

It is well known that Indonesia and Brazil are top two dissolving pulp origins of China, but most of which is consumed by back-integraded plants without big impact on dissolving pulp supply and demand on public market. The sharp reduction of import from the two countries is not an accident. The import from Indonesia amounts to 414kt in Jan-May, which is just 309kt in the same period of 2019. The import has been more than 100kt for consecutive two months of Apr-May, which is far higher than normal level. It seems to be caused by intensive arrival at ports and is normal to see lower import in Jun, so there is no need to express panics.

The import volume in Jun is just 180kt and it is unexpected to see monthly reduction of 40%, but the change is reasonable according to comparison of different origins. There are temporarily no signs of obvious changes occurring in supply-demand relationship and we cannot conclude that dissolving pulp import shows downtrend.

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