- Pulp prices broadly stable but with slight pressure in China: China import pulp prices for hardwood are now down 18% in the last eight weeks. NOREXECO pulp futures for the Q4 20E contract imply a 12-13% decline in Europe vs. a 2% decline in China.
- European graphic paper margins improving: CWF prices are gaining further traction, up 1.1% w/w and are now matching UWF gains YTD of 3.9%. After factoring in a 30% discount to list pulp prices, the CWF/HW spread improves this week but remains in the red at -EUR 18/t (UWF margin EUR 163/t). US CFS prices are gaining further traction (+USD 40/t in July) on the back of extremely tight supply, with Sappi North America now having declared its second moratorium (stopped taking orders) for two weeks in July. SAP and Verso have announced price increases of 7%, effective 1 August. Read-though for European UWF producers is also strong as US UFS is now up 11-13% y/y and with lead-times now extended out to up to 16 weeks.
- European containerboard prices in the green and OCC ticks up slightly: OCC prices have been stable for weeks; however, ticked up 1.4% this week due to tight supply (growing transport issues and impact of floods in central Europe) and strong demand. Hamburger Containerboard set to increase testliner prices for all grades by EUR 50/t from 1 September having cited “high-cost pressures” from starch, energy, and wastepaper. Leipa has also announced a EUR 50/t increase for its white top testliner due to strong demand and cost pressure. Sappi Europe has confirmed a price increase of 8-12% for all of its paperboard and containerboard deliveries from 1 September.
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