Market Pulp on the Move, Containerboard Stable

March 22, 2011 - Market pulp appears to be regaining traction and prices are headed upwards. Brazil's Fibria, along with Portuguese pulp producer Altri, (Europe only) have announced a $30/mton global price increase on hardwood pulp for April.

Softwood demand appears steady and prices are rising, say analysts at Deutsche Bank (DB) who cover the forest and paper products sector. Major producers have announced $30/mton price increase on softwood grades in China for April. In March, U.S. NBSK rose $30/mton to $990/mton.

“In meetings last week with DB and investors, CMPC suggested that softwood pulp would see further price increases,” noted Mark Wilde, a senior analyst at DB. “The March 11 earthquake in Japan has shutdown several pulp & paper mills, making raw material procurement difficult,” he added

Containerboard
February box shipments were down 1.9% year/year and inventories rose 11,000 tons month/month, DB reported. The key issue was severe weather conditions. The prospect of a spring price hike now appears “dead,” DB said.

Linerboard prices appear mostly stable with reports of some “spot deals” by tier-II producers, DB said. Export pricing is mixed. “We think the “best case scenario” is now a mid-summer price initiative," Wilde added.

In Europe, Smurfit Kappa has announced a E60/ton price increase on recycled containerboard. Reported prices in March were flat at $635-645/ton, +10.3% y/y.

SOURCE: Deutsche Bank