Market Pulp Trending Lower

The October global pulp shipments data recently released by PPPC suggest that the underlying demand for market pulp continues trending lower, according to Mark Wilde, senior analyst with Deutsche Bank. Shipments fell 7.5% m/m and 3.5% y/y, and inventories rose by 2 days to 34 days of supply, Wilde reports. Softwood markets, he says, remain relatively snug (shipments flat m/m and +3.8% y/y, inventories fell by 1 day to 26 days). Hardwood markets appear much weaker—shipments were down 16.1% m/m and 10.5% y/y in October and inventories rose by 5 days of supply to 43 days. List prices are off $30 - $50/metric ton in the domestic market and down more sharply in markets such as China. With reports of more supply coming online in Indonesia and China, prices are apt to come under some additional pressure, Wilde points out.

TAPPI
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