Market Pulp on the Move Again, UFS Price Headed Up

March 9, 2011 - According to research analysts, softwood list prices are set to rise $30 per metric ton in March, which would take NBSK to $990/mton in the U.S., $980/mton in Europe, and $890-900/mton in China.

"U.S. spot prices have jumped $60/mton in the last month to $770-810/mton, said Mark Wilde, senior analyst at Deutsche Bank (DB) covering the Paper & Forest Products sector.

"Reports suggest some spot deals as high as $830. Chinese demand for NBSK remains strong. Substitution of high-priced dissolving pulp by NBSK is providing an incremental demand boost.

"In March, hardwood 'list' prices are expected to be flat month/month," Wilde noted.

Uncoated Free Sheet (UFS)

All the major North American mills have announced a $40/ton hike on offset rolls, effective late March/early-April, DB said. The increase excludes cutsize, envelope & converting grades.

The price hike is being driven by rising input costs for fiber, energy and chemicals.

"Offset demand appears to be better than cutsize, driven by a steady recovery in commercial printing. Cutsize appears a bit more sluggish at the moment," Wilde said.

In January, shipments were down 3.7% year/year. In February, estimated offset prices were flat at $930/ton and 20-lb repro bond prices were flat at $1,095/ton, DB added.

Recycled Board

On March 1, RockTenn announced a $45/ton price hike on its Millennium coated recycled board (CRB) grades, effective April 1. Wilde pointed out that part of the increase may be driven by recent price increase announcements on competing grades like CUK.

A number of producers came out with price hikes in February. Newark Group announced a $40/ton price increase on uncoated recycled board (URB) effective mid-February, and Sonoco-Alcore announced a EUR 50/ton price hike on URB in Europe effective February 28.

"Between the two grades, CRB demand appears stronger than that of URB," Wilde said.