The global pulp market continues to be tight, Mark Wilde, senior analyst with Deutsche Bank, reports. Major producers have now announced $30- $50/metric ton price increases for May across key markets. In North America, Domtar, Canfor, and Mercer International have slated NBSK at $1,000/metric ton for May, +$40/metric ton. If implemented, North American NBSK prices will be up approximately 13% from the July 2008 cyclical high and up some 57% from the May 2009 cyclical low, Wilde notes. In Europe, producers have announced a $30/metric ton May price increase. On the hardwood side, Fibria, Suzano, and Altri have announced a $50/metric ton global price increase on bleached eucalyptus kraft pulp. "While Arauco and CMPC plan to restart most of their mills by end-April/early-May, we believe the 'Chile effect' on global supply could easily stretch to six months. The recent labor strike at pulp mills in Sweden will further tighten supply (global impact = approximately 1%). With inventories expected to decline further in March, global demand still strong, North American mills taking spring maintenance downtime, and a sharp rise in North American NBSK spot prices (+$40-$45/metric ton to $850-$890/metric ton), we feel that prospects for the May hike look good," Wilde comments.
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