Oct. 9, 2009 - Prices continue to rally for market pulp, says Mark Wilde, senior analyst at Deutsche Bank covering the Paper & Forest Products sector.

But, " ...we are hearing reports of slower Chinese demand, and Chinese buyers are reportedly resisting latest increase attempts," Wilde noted.

All major producers have announced $30-50/mton October price hike.

Domtar, Mercer International, SFK Pulp, Tembec, West Fraser, Weyco and Canfor have slated North America NBSK October price at $800/mton (+$30/mton).

In China, Mercer, Tembec, and West Fraser have slated October NBSK price at $670/mton (+$30/mton).

However, with reports suggesting that shipments to China could ease, the key question is whether the October price hike will stick, said Wilde.

Supply is creeping back into the market: Catalyst Paper, Domtar, Fraser Paper, Terrace Bay and Nanaimo have announced mill restarts.

Trade sources also report that pricing rebound is drawing high-cost Chinese pulp mills back into production, Wilde added.

SOURCE: Deutsche Bank