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Signs Point to Market Pulp Nearing End of Run

June 15, 2010 - Although market pulp prices continued to climb in June, industry analysts say after a 13-month run-up, the market may be at its peak.

U.S. and Europe appear OK on surface, but Asian markets — especially China and Korea — appear weak, commented analysts at Deutsche Bank who cover the forest and paper sector.

"Pending restart of nearly 2 million tpy in Canada and China and return of Chilean mills suggests that prices may be reaching near-term peak," said Mark Wilde, a senior analyst at Deutsche Bank.

"In Europe, we find combination of rising US dollar prices and a falling Euro very troublesome. A number of [our] trade sources are pointing to mills increasingly eager to cut "deals," Wilde said. "Some such reports suggest that prices on "spot" deals could be falling markedly.

"We are working to gain a better sense of the degree to which markets may have shifted direction," he added..

SOURCE: Deutsche Bank




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