NBSK Pricing Up Sharply in U.S.and Europe
June 9, 2009 - Although demand is off considerably compared to this time last year, prices for NBSK in the U.S. jumped up some $8.50/metric ton to $650.35/mton, according to Finland's FOEX.
Since October 2008, the price of NBSK in the U.S. has declined $250/mton, or 29 percent, settling at $635/mton in May. However, and despite the comparatively soft demand, most major producers during May have announced price increases of $20-30/mton for June shipments.
What's driving the price hikes? It appears to be the decline in global pulp inventories which, according to Deutche Bank analyst Mark Wilde, are down 8 days of supply to 35 days. In addition, the recent weakening of the US dollar has worked against Canadian, Brazilian, and other major pulp exporters.
Global capacity cuts in pulp production have also helped push NBSK prices outside the U.S. FOEX's index for NBSK in Europe moved up by USD 12.35 to $607.05. FOEX noted that the price increases in Europe are the result of capacity cuts and closures, along with a weak U.S. dollar and strong shipments to China. In fact, FOEX said that in the first four months of 2009 compared to 2008, shipments of market pulp to China are up 71 percent.
SOURCE: Deutche Bank and FOEX