Market Pulp Set to Decline

Market pulp prices appear set to decline this month, according to Mark Wilde, senior analyst with Deutsche Bank. Wilde notes that "while no other major producer announced a price decrease after Canfor's announcement of $20/metric ton price cut on NBSK, we are hearing of reports that others may announce similar price cuts."

On the hardwood side, Latin American producers Fibria (No. 1 producer in the world) and Suzano last week announced flat global prices on BEK for October. With buyers pushing for a $40 - $50/metric ton price decline this month, it's going to be a battle, Wilde says.

The August global market pulp data (higher inventories and lower shipments) suggest that buyers should have the bargaining power to drive down prices. Reports of producers offering ˜$25/metric ton discounts in South Korea also lends credence to this argument. "We also note that Terrace Bay restarted its 350,000 tpy NBSK mill in Ontario this week," Wilde reports.

TAPPI
http://www.tappi.org/