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Pulp Market Continues Strong Rally

Oct. 22, 2009 - The pulp market continues its roll, even stronger than Deutsche Bank (DB) analysts had expected.

According to DB, market pulp prices continue to rally driven by low mill inventories, strong Chinese demand and better than expected domestic demand.

A weaker USD is contributing to the rise in export prices, said Mark Wilde, senior analyst at Deutsche Bank covering the Paper & Forest Products sector. List prices on domestic NBSK rose for the fifth straight month, up $30/mton to $800/mton and SBSK +$30/mton to $750/mton.

On the hardwood side, relatively strong demand and tight supply conditions drove domestic prices +$50/mton to $700/mton for BEK, $685-690/mton for NBHK and $670/mton for SBHK.

In export markets like China, producers of NBSK, BEK and other key grades implemented the $30-50/mton October price hike, Wilde said.

Trade sources report that pricing rebound is drawing high-cost Chinese pulp mills back into production — as current market prices are now well above cash-cost.

Canadian producersí net realization is hurt by the rise in the Canadian dollar against the USD, Wilde added.

SOURCE: Deutsche Bank




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