Market Pulp Momentum Could Shift

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In the market pulp arena, Wilde notes that there could be a shift in momentum. With global pulp inventories rising by two days of supply in May and Asian markets (especially China and Korea) still weak, it appears that market pulp prices in July will remain flat at June levels, he explains. In the past 13 months, pulp prices have risen to all-time highs, driven by supply shock from February's Chilean earthquake and strong Chinese demand during 2009. In June, NBSK prices rose $20/metric ton to $1,020/metric ton in North America, $980/metric ton in Europe, and $890 - $900/metric ton in China. "However, with most Chilean mills back on-line, 2 million metric tons of restarts elsewhere, and most of the North American spring downtime behind us, pulp supplies could exceed demand in the coming months. The result is apt to be lower prices. There are already reports of increased discounts in spot markets. At the moment, Chinese markets are softer than in the U.S. and Europe. Hardwood pulp is weaker than softwood," Wilde says.