Shanghai pulp futures: what they are and who uses them

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Through August 2020, traders had dealt 14.8 million lots of Shanghai pulp futures that year, and 203,000 tons had been delivered since the 2018 listing. The contract covers softwood pulp only. This post explains what the Shanghai contracts are, how a futures contract ends in delivery and what a trader should check.

Published October 27, 2026 · Facts as of October 27, 2026 · 10 min read · Sources listed at the end

Facts as of October 27, 2026. This page states the facts as they stood on that date. Figures, rules and company plans may have changed since publication. We review this guide every six months and update the pages.

Nov 27, 2018Date the Shanghai Futures Exchange listed its physically delivered softwood pulp futures ¹

0Hardwood pulp contracts on SHFE's English product list on October 27, 2026 ²

Sep 10, 2025Date SHFE pulp options began trading ³

14.8 million lotsSHFE pulp volume for January to August 2020, the latest volume data we found ⁶

The 60-second version

What is it?

A futures contract fixes a price today for pulp that changes hands later. The Shanghai Futures Exchange (SHFE) lists one pulp futures contract. It covers bleached softwood kraft pulp (BSKP), and the exchange delivers real pulp against it ¹.

Why does it matter?

Pulp prices change from month to month. Chinese press said at the 2018 launch that paper companies could use the contract to manage raw material price risk, and that traders could use it to hedge stocks ⁷.

How does it work?

One lot is 10 tons ⁴. A trader who holds a contract past its last trading day, the 15th of the contract month, takes or makes delivery of pulp ⁴. A trader who wants no pulp closes the position before then.

Myth or fact?

"A Shanghai futures price is the price a mill pays for pulp."

See the answer

Mostly myth. SHFE quotes yuan a ton with 13% value added tax. To compare it with a dollar price delivered to China, Fastmarkets deducts 120 yuan for transport, deducts the 13% tax and converts the currency. After that conversion, the series has a 95% correlation with Fastmarkets' NBSK price since 2019 ⁹.

In this post

1. Which pulp contracts does Shanghai list?
2. What can a futures contract do for a buyer or a seller?
3. How does a Shanghai futures contract end in delivery?
4. Who uses Shanghai pulp futures?
5. Can you compare a Shanghai price with a net price?
6. What should a trader check before using these contracts?
7. What should you watch next?

01Which pulp contracts does Shanghai list?

The Shanghai Futures Exchange listed its woodpulp futures on November 27, 2018. The contract is based on bleached softwood kraft pulp, called BSKP. SHFE describes it as the only physically delivered pulp futures in the world ¹.

SHFE's English product list on October 27, 2026 shows Woodpulp and Offset Paper in its chemicals group. The woodpulp page links to a woodpulp options page ². No hardwood pulp contract appears on that list ². We checked the product list only. No source we found says whether SHFE plans a hardwood contract.

SHFE listed pulp options on September 10, 2025, on the same day as offset printing paper futures and options ³. An option gives its holder the choice to trade at a set price later, and the holder can let it lapse. No source we found gives the terms of the pulp options.

The only hardwood pulp futures we found come from Norexeco, a Norwegian exchange. On June 1, 2021, it launched two cash-settled China pulp futures, one on softwood and one on hardwood. The hardwood contract settles on the monthly average of PIX China BHKP Net, a Fastmarkets price for bleached hardwood kraft pulp ⁸. No source we found gives current trading volume for the Norexeco contracts. The table sets the three contracts side by side.

Compare

Three pulp contracts side by side

Sources: SHFE ^1,2,3, a broker copy of the SHFE contract text from 2020 ⁴, China Securities Journal ⁶ and Fastmarkets ⁸. "Not found" means no source we found gives the item.

Item	SHFE softwood futures	SHFE pulp options	Norexeco hardwood futures
Pulp	Bleached softwood kraft pulp (BSKP)	Linked from the SHFE woodpulp page	Bleached hardwood kraft pulp, PIX China BHKP Net
Where	Shanghai Futures Exchange	Shanghai Futures Exchange	Norexeco, a Norwegian exchange
Started	November 27, 2018	September 10, 2025	June 1, 2021
How it ends	Physical delivery	Terms not found	Cash settlement on the monthly average price
Size and price unit	10 tons a lot, yuan a ton	Not found	Not found
Latest volume found	14.8 million lots, January to August 2020	Not found	Not found

02What can a futures contract do for a buyer or a seller?

A futures contract fixes a price now for pulp that moves later. It is a close relative of forward contracts. Both fix a price today for a later date. A futures contract is traded on an exchange, with a standard size and standard months, so any approved trader can buy or sell it.

This is general practice, and it works the same way for any commodity. A seller who will have pulp to sell later can sell futures. If the market price falls, the loss on the pulp is matched in part by a gain on the futures. A buyer who must buy pulp later can buy futures. If the market price rises, the extra cost of the pulp is matched in part by a gain on the futures. This is called hedging. The match is never exact, because the futures price and the price in a pulp contract are two different prices.

Chinese press wrote at the 2018 launch that paper companies could manage raw material price risk by hedging, and that traders could hedge stocks against falling prices ⁷. The same article said the listing would help Chinese companies compete for pulp pricing power ⁷. China's securities regulator described pulp futures as hedging tools for producers, consumers and traders ¹¹.

Futures also need cash. An exchange asks each trader to post margin, and gains and losses are settled every day. In the 2020 contract text copied by a broker, the minimum margin was 4% of contract value ⁴. That cash is working capital tied up while the position is open. For how cash sits in a pulp chain, see Cash in the chain: terms, letters of credit and stock at ports. For how a lender prices that risk, see how trade finance is priced.

03How does a Shanghai futures contract end in delivery?

SHFE lists monthly contracts for the most recent twelve months ⁴. A trader can close a position before the contract ends. A position still open on the last trading day goes to delivery. The flow below follows the contract text that a Shanghai broker copied in 2020 ⁴. SHFE changes rules by circular. One circular, dated April 7, 2023, revised the BSKP factory delivery rules from April 1, 2024 ¹⁰. We could not read the revised rules.

Delivery uses a warehouse receipt, a document that shows who owns pulp stored in an approved site. SHFE also uses standard mill warehouse receipts. On September 9, 2020, SHFE named three firms as designated BSKP mill warehouses from September 28, 2020: Xiamen Xiangyu Paper (Jianfa Paper), Zhejiang Yongan Capital Management and Jinyi Trading (Shanghai) ⁵.

SHFE says the deliverable pulp comes from exchange-certified brands, with origins in Canada, Finland, Russia, Chile and Sweden, among others ¹. We could not retrieve the brand list or the current delivery limits.

1. Contract monthContracts run month by month, from January to December, for the most recent twelve months ⁴.
2. Last trading dayTrading in the contract stops on the 15th day of the contract month ⁴.
3. Three delivery daysDelivery takes place on three consecutive business days after the last trading day ⁴.
4. ReceiptThe seller hands over a standard warehouse receipt or a standard mill warehouse receipt for pulp at an approved site ^1,5.
5. Pulp changes handsThe buyer receives exchange-certified BSKP. The minimum delivery size is 20 tons ^1,4.

SHFE says its softwood pulp futures are delivered at approved warehouse and factory sites for exchange-certified brands.

04Who uses Shanghai pulp futures?

Few sources say who uses the contract. Chinese press at the 2018 launch expected paper companies and traders to use it for hedging ⁷. That was an expectation written on the day after launch. It was not a survey. SHFE says that since 2018 pulp futures have "won broad recognition from upstream, midstream and downstream firms" ⁷.

The only split of users we found is from August 2020. Institutional accounts made up about 40% of daily trading and 55% of open interest ⁶. Open interest is the number of contracts still open. The report does not split institutions into hedgers and other traders.

The same report gives these figures, dated August 31, 2020 ⁶:

• 14.8 million lots traded in 2020 to date.
• A daily average of 92,000 lots traded.
• A daily average open interest of 126,000 lots, up 21% on the year before.
• 203,000 tons delivered since listing.

One lot is 10 tons ⁴. These are 2020 figures, and the latest volume data we found is from August 2020. They say nothing about liquidity today. No source we found gives volume or open interest for 2025 or 2026, and the report does not say whether lots are counted on one side of each trade or both. For how much pulp China buys and makes, see China: the largest buyer is building its own mills.

05Can you compare a Shanghai price with a net price?

Not without a conversion. SHFE prices are in yuan a ton and include 13% value added tax ⁹. Fastmarkets converts the SHFE settlement price so it can be set beside its price for NBSK delivered to China on a CIF basis. It deducts 120 yuan for transport, deducts the 13% tax and converts yuan to dollars ⁹. Since 2019, the adjusted series has shown a 95% correlation with Fastmarkets' NBSK CIF China assessment ⁹.

The currency step matters to a buyer who pays in dollars. A hedge priced in yuan leaves exchange rate risk between the two currencies. A trader has to count that risk in any hedge.

These are also different prices from the list and net prices in One ton of pulp, two prices: $1,710 or $722?. A Shanghai price, a list price and a net price each answer a different question.

06What should a trader check before using these contracts?

The checklist below covers the points where the sources are clear and the points we could not confirm. Check the open points on SHFE's own site before any trade.

Checklist

Five checks before using Shanghai pulp contracts

• Which contract?SHFE softwood futures, SHFE pulp options and Norexeco hardwood futures have different pulp, terms and start dates ^1,3,8.
• Delivery or cash?SHFE futures end in physical delivery. The Norexeco contracts settle in cash on a monthly average price ^1,8.
• Which brand and origin?Only exchange-certified BSKP brands can be delivered ¹. We could not retrieve the brand list. Check it on SHFE.
• Which price basis?SHFE quotes yuan a ton with 13% value added tax. Convert it before you compare it with a dollar price ⁹.
• Which margin and limits?A 2020 broker copy gives a 4% minimum margin and a 3% daily price limit. These are contract minimums and SHFE changes them by circular ⁴. Check the current levels.

07What should you watch next?

The dated items below show when each contract or rule started, and what to watch for next. Live rates for tariffs and trade rules sit in the pulp watch.

• Oct 27, 2026SHFE's product list shows woodpulp and offset paper, and no hardwood pulp contract ². Watch for a hardwood announcement. No source we found gives one.
• Sep 10, 2025SHFE pulp options begin trading, with offset printing paper futures and options ³. Watch for their trading volume. We found none.
• Apr 1, 2024Revised BSKP factory delivery rules apply, per an SHFE circular of April 7, 2023 ¹⁰.
• Jun 1, 2021Norexeco launches cash-settled softwood and hardwood China pulp futures ⁸.
• Sep 28, 2020Three designated BSKP mill warehouses can issue standard mill warehouse receipts ⁵.
• Nov 27, 2018SHFE lists woodpulp futures ¹.

What this means for traders

• Name the contract before you discuss a hedge: SHFE softwood futures end in delivery, SHFE pulp options are new, and Norexeco hardwood futures settle in cash.
• Put a date on every volume figure. The latest we found is from August 2020, so it does not show liquidity today.
• Convert a Shanghai price before you set it beside a net or list price, and count the margin cash and the currency in the cost of a hedge.

Questions traders ask

What is the Shanghai pulp futures contract?

It is a contract listed by the Shanghai Futures Exchange on November 27, 2018. It is based on bleached softwood kraft pulp and ends in physical delivery. One lot is 10 tons.

Does Shanghai have a hardwood pulp futures contract?

No hardwood pulp contract appears on SHFE's English product list as of October 27, 2026. The only hardwood pulp futures we found is Norexeco's cash-settled contract on PIX China BHKP Net, launched June 1, 2021.

When did Shanghai pulp options start?

SHFE pulp options began trading on September 10, 2025, on the same day as offset printing paper futures and options. We found no source that gives their terms or volume.

How much do Shanghai pulp futures trade?

The latest figures we found are from August 2020. Through August 31, 2020, volume was 14.8 million lots in that year, with a daily average open interest of 126,000 lots. We found no figures for 2025 or 2026.

What is the difference between a futures contract and a forward contract?

Both fix a price today for a later date. A futures contract is traded on an exchange with a standard size and standard months. A forward contract is a private agreement between two parties on terms they set.

Read next

• Money and rulesOne ton of pulp, two prices: $1,710 or $722?
• Money and rulesCash in the chain: terms, letters of credit and stock at ports
• Makers and buyersChina: the largest buyer is building its own mills
• Money and rulesPulp watch: every rule and date in one place
• Start hereThe pulp trade map: who ships to whom, 2015 to 2025
• Start hereWhy countries' pulp numbers don't match
• Ossiano Trade Finance GuideHow each trade finance instrument works
• GlossaryTrade finance terms in plain English

Hedging or financing a pulp position? Ossiano Capital works on trade finance for pulp and paper trades.

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Sources and notes

1. Shanghai Futures Exchange, Woodpulp futures product page (English), read October 17 and 27, 2026. https://www.shfe.com.cn/eng/Market/Futures/Chemical/sp_f/
2. Shanghai Futures Exchange, English site Chemical product list, read October 27, 2026. https://www.shfe.com.cn/eng/Market/Futures/Chemical/sp_f/Appendixes/
3. Xinhua News Agency, September 10, 2025; China Securities Journal, September 11, 2025 (pulp options and offset printing paper futures and options begin trading). https://www.news.cn/fortune/20250910/3f91fd6cf34c4bbebd7b035cf48736fc/c.html
4. Shenyin & Wanguo Futures, SHFE Bleached Softwood Kraft Pulp futures contract specification (English), September 29, 2020 (broker copy of the contract text). https://www.sywgqh.com.cn/Pc/English/Futures_contracts/96142.html
5. China Securities Journal, announcement of designated BSKP mill warehouses, September 9, 2020. https://cs.com.cn/xwzx/hg/202009/t20200909_6093243.html
6. China Securities Journal, report on the Norexeco licensing agreement with SHFE data to August 31, 2020, September 19, 2020. https://cs.com.cn/zzqh2020/202009/t20200919_6096078.html
7. China Securities Journal, November 28, 2018 (launch commentary); SHFE drafting note on offset printing paper futures and options, 2025. https://cs.com.cn/zzqh/01/201811/t20181128_5898288.html
8. Fastmarkets, NOREXECO launches China softwood and hardwood pulp futures based on Fastmarkets prices, 2021. https://fastmarkets.com/insights/norexeco-launches-china-softwood-and-hardwood-pulp-futures-based-on-fastmarkets-prices
9. Fastmarkets, Commodity risk management: Evaluating the Spread between SHFE and NBSK pulp futures, August 30, 2022. https://fastmarkets.com/?p=29157
10. Shanghai Futures Exchange, circular on the revised bleached softwood kraft pulp factory delivery rules, April 7, 2023, via Mondovisione. https://mondovisione.com/media-and-resources/news/circular-on-releasing-the-revised-bleached-softwood-kraft-pulp-factory-delivery-202347/
11. Yicai Global, China's First Pulp Futures Stumble in Market Debut, November 28, 2018 (statement by the vice chairman of the China Securities Regulatory Commission). https://yicaiglobal.com/news/china-first-pulp-futures-stumble-in-market-debut

Trade figures come from UN Comtrade (2015 to 2025, as reported by 10 countries) and FAOSTAT (1961 to 2024), checked and recalculated by us; each chart names whose data it uses. All tons are metric tons. All facts on this page are as of October 27, 2026, the date of publication, and may have changed since. For rules and tariffs, check the pulp watch before you act.

About this post. Prepared for Ossiano Capital. People planned, researched, wrote and checked this post, using AI tools to help with research and checking. You are welcome to quote or reuse it: please credit Ossiano Capital and link to this page.