• Global pulp inventories increase further, compounded by pressure from P&B shuts in China: August global pulp shipments +1.2% m/m but down 6.7% y/y (China: -2.9% m/m & -23.2% y/y; North America: +6.2% m/m & -1.5% y/y). The shipment-to-capacity ratio was flat at 82% and days of supply up 3 days to 47 in August (BSK: 46; BHK: 50). This is at a time when there is unexpected energy related downtime (policy likely to continue for the whole of Q4) for paper and paperboard mills in China. This is likely to put downward pressure on prices globally. NOREXECO pulp futures for CY Q4 21E imply an 8-9% decline in Europe vs. a 2-4% decline in China.  
  • European graphic paper margins remain under pressure: After factoring in a 30% discount to list pulp prices, the CWF/HW spread remains in the red at -EUR 14/t (UWF margin EUR 174/t). EURO-GRAPH released July stats for European graphic paper demand. Total European CWF shipments increased by 30% y/y (Within Europe: +15% and exports: +125%), while total European UWF shipments increased by 6% y/y (Within Europe: +3% and exports: +21%). In the US, CFS prices are up m/m another USD 50-60/t in September. US CFS shipments were up 20% y/y in August (exports +6% and imports +46%).
  • Despite OCC prices up 86% YTD, the Testliner/OCC spread is up 34%: DS Smith set to increase testliner prices by EUR 50/t in Europe due to continued strong demand and high input costs.  
  • + read-though for Mondi: WestRock sets USD 60-70/t increase for unbleached and bleached kraft paper from 1 November. This is the fourth price increase in the past 12 months on the back of “unprecedented supply and demand conditions”. WestRock is North America’s largest unbleached and bleached kraft paper producer, with a 30% share of kraft paper and 45% share of unbleached kraft paper capacity.    
  • + read-though for Sappi: Mayr-Melnhof to increase folding boxboard prices by EUR 70/t from 1 October.

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