• Chinese BSK futures pumps the brakes this week: The May softwood contract on the Shanghai Futures Exchange settled at RMB 7,218/t last week Thursday, a drop of RMB 152/t from two weeks ago. We note that LatAM pulp producers are now raising concern over break bulk shipments (80% of Brazil pulp exports take place in break bulk), which is now being impacted by logistical issues and maritime freight. Even though pulp demand has been strong in 2021, Brazil pulp exports are down to 1mt from 1.4mt in November last year.   
  • Non-integrated graphic producers burning more cash this week: Brazil remains a key export market for CWF. Encouragingly, imported CWF prices are rising (sheets are up from USD 720-750/t in January to USD 800-830/t in March). January P&W imports into Brazil were down 42% in January, while apparent consumption was down 9%.
  • US kraftliner market remains supportive of European pricing: Lower kraftliner supply and robust US corrugated box demand has seen six consecutive price increases for export markets for unbleached kraftliner. YTD kraftliner imports into China are down 42% and Europe down 13%. We also caution with an initial sign of weakness in Chinese testliner demand driving shuts in March/April from the likes of Nine Dragons and Shanying International.
  • DS Smith confirms another testliner price increase of EUR 50/t in Europe: The price increase is effective for all new orders from 11 March. The increase is on the back of continued strong demand and rising input costs. We note that OCC continues to rise, up 9% w/w. In terms of containerboard, testliner led the way this past week (up 1.3%), followed by kraftliner and white-top kraftliner. In Brazil, Klabin announced price increases of 14% for kraftliner and white-top kraftliner from April and announced a EUR 50/t increase for Europe as well.
  • Positive read-though for Sappi: Further solid bleached sulphate board price increase of USD 50/t from 1 April announced in the US by Graphic Packaging. Lecta announces a 10% price increase for its specialty papers, effective for all deliveries from 1 April 2021 in Europe and overseas markets.  Metsä Board has announced a EUR 85/t increase for FBB effective 3 May.

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