Market Pulp Prices Continue Upward Trend

June 8, 2010 - The upward price trend in market pulp continues, but there are important distances between grades and between regions, say analysts at Deutsche Bank (DB) who cover the forest and paper sector.

In the U.S., NBSK has topped $1,000, with producers announcing a June 1 increase of $20 per metric ton, which pushes the new price to $1,020/mton.

In Europe, NBSK is $980/mton and in China, $890-900/mton.

According to Mark Wilde, senior analyst at DB, Asian hardwood markets appear to be the weakest spot, and over the next several weeks, European markets will be worth watching as rising US$ prices and a falling Euro create a double-dose of cost pressure for non-integrated mills.

From a global perspective, Wilde noted that most major pulp producers announced $20-40/mton (June 1) price increase on various pulp grades. In fluff pulp, Georgia-Pacific last week announced $40/mton price increase for June 1. Weyerhaeuser has announced $20/mton while International Paper and AbitibiBowater have announced $30/mton in fluff.

“While falling Chinese resale prices, weak Euro, and pending restart of close to 2 million tons per year of pulp capacity in Canada and China suggest that prices may be reaching a near-term peak, a recent announcement by Chinese authorities of prospective closure of [about] 4 million tons of paper, board, and pulp capacity could act as a catalyst for further price increases,” Wilde said.

SOURCE: Deutsche Bank

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