Chilean earthquake could cause pulp supply crisis and escalating prices
The Chilean earthquake and resultant reduction in pulp supply comes at a time when pulp markets are already very tight with Chinese customers on allocation. The immediate impact is likely to be higher pulp prices leading to higher paper prices. NBSK pulp prices are already at US$890/tonne.
Fibre costs were 53% of the total pulp production costs
The largest cost component when manufacturing wood pulp is the cost of wood fiber. In the 1Q/09, this cost was 53% of the total production cost worldwide. Both the relative and nominal cost of wood have declined the past year; wood fiber costs in the 2Q/09 were at their lowest levels in over two years, according to the Wood Resource Quarterly.
Paper and board deliveries by CEPI countries were 21.7 million tonnes in the first quarter of 2009 as demand continues to be affected by the economic situation
Consumption and trade in paper and board contracted further during the first quarter of 2009 as the global economic downturn continued to affect the industry. Consumption was at its lowest quarterly level since 2003 and total exports fell below 3 million tonnes in a quarter for the first time since this report was introduced.
29.6.2009: For the second consecutive month, pulp producers are taking advantage of tighter supply conditions, if not better demand, and are seeking price hikes worldwide. For July, increases have been announced for softwood and hardwoods for North America, Europe and China/Asia. The hikes are generally $20-$30/tonne, but a $20-$40 increases for North American NBSK would put the list at $700.