Market Pulp Prices Deteriorating

Print this article | Send to Colleague

Global market pulp prices are deteriorating, according to Mark Wilde, senior analyst, Deutsche Bank. The upheaval that started with China, is now spreading rather rapidly and more dramatically to other regions, Wilde says. Last week, at least five major producers in North America announced $30/metric ton price cuts on North American NBSK, effective August 1. Alpac announced $40/metric ton price cut on U.S. NBHK. In China, Ilim has cut BHK prices by $160/metric ton, and Arauco has cut BEK by $40-50/metric ton. Market observers expect big Brazilian producers to trim their list prices by at least $30/metric ton this week.

These list price reductions don't capture the ballooning in discounts given to medium/large customers, Wilde adds. Those discounts now appear to be as high as 20% - 25%, rendering "list" prices less and less relevant, he adds. With U.S. spot NBSK prices declining, producer inventories expected to rise in June, slower summer demand, mill starts/restarts, and sharp cuts in Chinese prices, North American pulp prices seem destined to continue correcting downward.