• China and US pulp prices in the red:  China pulp prices are likely to remain stable, if not improve slightly as China exits a lower demand season and if China is able to export more paper assuming logistics improve. Pulp stocks in China are reducing again, which could see restocking at the end of August and September. Despite lower US prices, this could be short-lived due to wildfires in British Columbia leading to logistic problems, causing mills to reduce/cease production due to lack of fibre availability. NOREXECO pulp futures for the Q4 20E contract imply a 11-12% decline in Europe vs. a 1-3% decline in China. Meanwhile, the CY 22E contracts for Europe increased by 1%, while China remains steady.  
  • CWF margins improving despite higher pulp prices: CWF prices are gaining further traction, up 1.4% w/w and are now up 5.3% YTD vs. UWF +4.0% YTD. After factoring in a 30% discount to list pulp prices, the CWF/HW spread improves this week but remains in the red at -EUR 16/t (UWF margin EUR 157/t).  
  • Kraftliner up 2.5% w/w: OCC prices ticked up 1.1% again this week. In the US, export pricing for recovered paper is at record highs due to a global increase in fibre demand despite China’s ban and other Asian countries following suit (Indonesia has implemented a 2% contamination limit and Malaysia has banned mixed paper).
  • North American kraft paper producers seeking price increases of USD 50-60/t: This is on the back of steady to strong demand for bags and other products from grocers, restaurants including quick-service-restaurants, and cafeterias.

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