- Week ahead: 1/1 calls with Valmet, Stora Enso, International Paper and Mondi.
- European corrugated shipments mixed for first seven months due to tourism or lack thereof: Germany (+0.3%) and Austria (+0.1%), while Poland, Czech Republic, Russia and Turkey have seen good demand. Conversely, significant declines in Spain, Italy, Portugal, France and Croatia. Tourism comprises 10% of Europe’s GDP, which is heavily skewed to Southern countries (13-15%: Italy and Spain; 19-25%: Portugal, Greece and Croatia). Conversely, Western and Eastern European countries are much lower (5%: Belgium, Netherlands, Poland, Lithuania, Romania and Russia and Germany <10%). Lack of travel has negatively impacted “receiving” countries but also benefitted “tourist exporter” countries consuming more while at home. Manufacturing economies (North & East Europe) have been easier to restart vs. serviced based (South & West Europe).
- Hamburger’s new testliner machine starts ramp-up: PM2 at its Spremberg mill in German (7.8m wide 500kpta: both brown and white containerboard) is expected to see first production late September/early October.
- DS Smith still targeting lower integration: They are currently c.80% integrated in Europe and want to reduce this to 60%. They have flagged disposals in central Europe as likely, where they deem excess capacity. We note that they have mothballed a machine in Romania with a capacity of 150-200ktpa.
- More plastic out the system: News UK replaces single-use plastic wrapping (800ktpa) for weekend magazine with recyclable paper.
- Nordic paper submits environmental permit to increase pulp and kraft paper capacity: They want to increase unbleached kraft pulp by 50ktpa and kraft paper by 20ktpa at its Bäckhammar mill in Sweden (current capacity: 160ktpa of kraft paper and 230ktpa of pulp).
- Pulp markets stable but SW producers optimistic: Both Södra and SCA have announced NBSK price increases of USD 40/t in Europe effective 1 October. Both producers seem confident in light of “healthy demand in Europe” and “distinct signs of a recovery in China”, further supported by “balanced stocks”. In our view, the supply chain should tighten in H2 in light of planned maintenance.
- Lenzing sends 100% made in Austria TENCEL fibres to China by train for the first time: This has been driven by a ST increase in demand for sustainably produced fibres from Chinese customers. The new transport route allows Lenzing to meet demand in China 2x quicker than usual sea freight.
- Sappi upgrades Gratkorn (Austria), its largest production site in Europe (1mtpa CWF and 1,240 employees): Boiler 11 will see a shift from coal to multi-fuel in two stages with the goal to ultimately use only renewable fuels. This will reduce CO2 emissions at the mill by 30% (supports SAP’s overall decarbonisation strategy to reduce GHG emissions by 25% by 2025).
- Digital, massive beneficiary of COVID: One out of every eight newspapers in Germany is now a digital newspaper. Digital newspaper circulation in Germany increased by 20% to over 2m copies in Q2 20A.
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