[Guohai Light Industry] Paper Industry Outlook Update: Cyclical Bottom Solidified, Marginal Improvement Signals Accumulating

English summary

Wood pulp side: In July, average spot prices of imported wood pulp showed divergent trends. Softwood pulp was boosted by futures gains and news of CanforNorthwood's permanent mill closure (300k tons/year), with monthly average price at RMB 4,860/ton, +0.10% MoM, turning from decline to increase. Hardwood pulp was dragged by easing overseas prices and weak demand, with monthly average price at RMB 4,382/ton, -1.95% MoM. Unbleached kraft pulp was RMB 5,168/ton, +2.38% MoM; chemi-mechanical pulp was RMB 3,586/ton, -3.96% MoM. - Port inventory stood at 2.2725 million tons, -2.68% MoM, reversing from increase to decline. - Outlook: In August, supply-demand contradictions persist, and pulp prices are expected to remain under pressure; in September-October, traditional peak season demand may improve marginally, coupled with softwood pulp cost support, pulp prices are expected to stabilize with slight recovery. Waste paper side: In July, average price of waste OCC was RMB 1,898/ton, +6.81% MoM, +28.59% YoY, rising first then falling. In early-to-mid month, supply was tight due to typhoon and rainfall, and packing stations were reluctant to sell; in mid-to-late month, finished paper demand slowed, packing stations accelerated shipments, and paper mills broadly cut purchase prices. …