- Pulp set to gain further ground in May: Further pressure on supply (logistic problems and un/planned downtime), the ongoing gap between prices in Europe and China and robust domestic demand are driving pulp prices higher. China BSK pulp futures bounced back after the five-day May holiday. The June contract settled at RMB 7,342/t, up 3% (USD 989/t excl. VAT and logistic costs). Pulp prices in China remain underpinned by packaging producers raising prices further. Looking froward, CMPC expects May pulp prices in China to be stable with negotiations likely to remain unchanged in June. CMPC did indicate that softwood was fully sold out for May, while c.50% of their hardwood volumes had been concluded (their stocks are currently low). CMPC sees scope for further price increase in Europe. North American pulp producers confirmed further price increase of USD 100/t for NBSK and USD 75/t for NBHK effective May. Spot US list prices are up USD 510/t YTD and are at a 19-year high.
- Green shoots for Graphic paper prices in Europe but still lots of catch-up to pulp prices required: Despite CWF up 1% w/w, followed by UWF (+0.5%), the CWF/HW spread is further in the red at EUR 229/t (UWF producers: -EUR 27/t). Encouragingly, Brazilian imported CWF and UWF prices are now up 27% y/y (in line with domestic prices) and 22%, respectively. Brazil March imports for P&W was down 19% y/y (Q1 21A: -27% y/y).
- European containerboard prices stable but set to increase further in June: Supply/demand for brown kraftliner remained imbalanced in April, with no signs of improved paper availability. SCA, Smurfit Kappa and Mondi have announced a EUR 50/t increase from June. Testliner demand remains strong, with low stocks. European OCC price register first decline since August 2020; however, are still up 123% y/y. In the US, OCC prices are up seven months in a row, with the May recovered paper price now at USD 131/t (FOB).
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