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In the U.S. Containerboard Sector, end of black liquor credits is apt to prove a "game changer," according to Mark Wilde, senior analyst with Deutsche Bank. "We're seeing a sharp rebound in export linerboard prices in most world markets (Latin America, Europe, and Africa = $50+/metric ton / Middle East = $80+/metric ton). When coupled with large supply reductions (IP and West Fraser = 1.8million tons), expiration of black liquor credits (estimated benefit ˜$150/ton, but some companies reporting $180+/ton), and a falling U.S. dollar, we expect a first quarter domestic price hike attempt," Wilde notes, adding that other factors include improving global demand and inventory restocking.
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