Market Pulp Prices Could Be Peaking

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Major pulp producers announced a $20-$30/metric ton June 1 price increase for NBSK and BEK., according to Mark Wilde, senior analyst at Deutsche Bank. If implemented, NBSK will rise to $1,020/metric ton in North America, $980/metric ton in Europe, and $890-$900/metric ton in China. The latest price hike is driven by a fall in pulp producer inventories by 1 day of supply to 25 days, Wilde explains, adding that in N.A., market conditions are still fairly tight, driven by strong demand, reduced supply from Chile, and spring maintenance downtime. U.S. NBSK spot prices rose to $900-$940/metric ton in the East and Midwest. However, falling Chinese resale prices, weakening of the Euro against the U.S. dollar (˜6% from April 1 levels), and pending restart of close to 2 million metric tpy of market pulp capacity in Canada and China from this month through August suggest that pulp prices are peaking, Wilde says.