Higher pulp prices in July 2009

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.

Despite decelerating pulp market activities in May, the Pulp and Paper Products Council reported that inventories fell by one day from the end of April to 34 days of supply. That lowered estimated inventory tonnage by around 50,000 tonnes to 3.9 million tonnes, according to one private source.

In North America, NBSK prices are moving up by $30-$40/tonne despite a lack of demand.

For June, according to Foex Indexes, the majority of the contract prices reported is in a range of $635-$660, with the June list of $660 as the most common individual quote.

With the strengthened Canadian dollar, Canadian producers Canfor Pulp, Domtar, West Fraser Timber, Northern Pulp Nova Scotia and Tembec made their increases effective as quickly as possible. Northern Pulp said its $700 prices would be effective for all future business for the remainder of June and through July.

Domtar's increase for NBSK is a $20 move from its June 1 US list price of $680/tonne. Tembec said its July $700 pricetag in the U.S. is from $660/tonne in June. Alpac Pulp Sales didn't detail the raise in setting Al-Pac Spruce at $700/tonne.

For NBSK, major suppliers to the European market have announced $30/tonne prices hikes for July 1.

"The market balance for pulp continue to improve with reduced stock levels," said Södra Cell in announcing a $660/tonne price for all deliveries from July 1.

Mercer International, Billerud and Rottneros separately followed with the $660/tonne level from July 1. In Europe, Tembec’s southern France softwood will jump $50/tonne to $640/tonne.

North American producers earlier had unveiled plans to raise their European NBSK prices to $670 (West Fraser, Canfor) and $680/tonne (Domtar) next month. The Canadians previously set a $660 target level for June. Canfor is at $670 for July.

Foex, which has an excellent reporting system for northern European pulp prices, has NBSK currently at $613.52 with a range of $590-$630 and most quotes at $600 and $630/tonne, the June target.

North American hardwood is going up $30/tonne to $575 for northern and southern mixed grades and $590 for eucalyptus. The European price will be $530, effective July 1.

Alpac Pulp Sales kicked things off in the North American market by putting Al-Pac Aspen's list at $575, a $30/tonne increase.

Joining the $575 level are Domtar and Sappi Fine Paper North America. Maple is at $585/tonne.

Brazilians Suzano and VCP have put their July North American prices at $590/tonne and are listing BEK at $530/tonne for Europe, effective mid- to late-June, and $480/tonne in China. Chile's Arauco earlier has set its eucalyptus net prices in China at a $30/tonne increase to $480. In China, the net price for July generally will be $480/tonne.

The VCP North American list will be $590/tonne, a $25/tonne hike. In Europe the price is $530/tonne -- a level that was to become effective June 11. Its plans in China are for $480/tonne net CIF and $520 for BEK in Asian markets outside China.

Suzano's new worldwide levels, after a $30/tonne hike, are $530/tonne for eucalyptus sold in Europe, effective June 19. Suzano also is at $590/tonne in North America and to $520/tonne in non-ChinaAsia (ex-China), effective July 1.

Foex Indexes put the China average hardwood price at $462.30/tonne on June 23 after a $20/tonne jump in the month and $50 move since April. Producers now seek net increases of $30/tonne to $480/tonne cif, effective July 1.

Eucalyptus producers also raised their June prices by $20 in North America and by $30/tonne in Asia. European hardwood producers Södra Cell, Botnia and Cenibra aim to raise selling levels by $30/tonne to $530/tonne in Europe. Botnia and Södra produce and sell both bleached birch hardwood and bleached eucalyptus pulps.

July NBSK to China is going to $590/tonne (up $30) for standard grades from Canfor, $580 from Mercer International, West Fraser and Tembec (+$30).

Tembec said it June prices to China (Asia) will also increase $30/tonne, effectively immediately, for Maple 80/Aspen 85 and Maple 70, to $510/tonne and $480/tonne, respectively.

Arauco announced a $20-30 hikes for July. Bleached radiata pine will be $540/tonne net cif, up $20. Unbleached radiata will be $480 (+$30) and eucalyptus at $470/tonne, up $30/tonne.

In other grades, West Fraser informed Asian customers that its BCTMP prices will rise $30/tonne, effective July 1, putting the China price for 75 bright softwood BCMTP to $480/tonne and its 85 bright hardwood BCTMP to $500/tonne.

May shipments of chemical paper-grade market pulp from World 20 producers pulled back to 86% of capacity following April’s torrid pace, according to statistics released by the Pulp and Paper Products Council.

Shipments of 3.329 million tonnes were down 5.4% from the May 2008 level and were off 6.0% (212,000 tonnes) from April.

The month-to-month difference was mainly attributable to China buyers receiving 25.1% fewer tonnes than April’s record of 970,000 tonnes. Still, May shipments to China were 727,000 tonnes, an increase of 46.6% from last year that left the five-month gain at 65.5%, or 1.52 million tons.

The PPPC noted that shipments to China slowed in May "while sales to most others markets remained depressed."

The year-over-year decline in shipments was the 11th consecutively and put the deficit in tonnes shipped through May at 1.165 million tonnes, PPPC data showed.

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Issued by:  PulpandPaper Net

Author: Gregg Fales, 3G Publishing

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Issue date: July 9, 2009

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