• Pulp gains further ground across the board (two week % moves: Europe +7%; US +6% and China +2-7%): Demand remains solid, price differentials with Europe and other regions and supply-side continues to provide strong underpin for prices.  
  • Graphic paper prices not moving in Europe, means non-integrated producers under further pressure:  The CWF/HW spread is further in the red at EUR 167/t vs. UWF producers, who are just in the green at EUR 27/t. Sappi Europe has announced a price increase of 10-12% for all its coated mechanical grades effective immediately, having cited “heavy input cost rises in raw materials and freight rates”. SAP also alluded to further increases, assuming cost pressure persist.  
  • Here we go again, European containerboard prices to gain further momentum: Smurfit Kappa: EUR 50/t for testliner from 1 May and 1 June for kraftliner, citing strong demand globally and tight supply. DS Smith: EUR 50/t for testliner effective immediately due to significant increase in input costs and continued strong demand. Hamburger: EUR 50/t for brown and white top testliner from 1 May citing very strong demand. SCA: Brown and white kraftliner EUR 50/t from 1 June, citing high demand for kraftliner globally. In Europe, supply will get tighter in the ST, as Leipa’s 450ktpa PM5 in Germany is down for at least four weeks due to technical problems.
  • Sack kraft paper prices moving up in Europe on back of strong demand and tight supply: Unbleached sack kraft has ticked up c. EUR 100/t YTD (50% in February and 50% in April), while bleached increased by EUR 50/t in April. Demand has surprised to the upside (agricultural and food has been stable, while building materials sector has been strong). Supply has tightened due to Segheza’s planned maintenance on its recovery boilers, with further downtime planned in June and July for its largest boiler. With a tight containerboard market, this has enticed swing capacity from sack kraft to produce kraftliner. Further increases could be on the cards.

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