- Pulp prices broadly stable: However, the SHFE BSK futures fell again this week, undermining arbitrage buying (November: USD 709/t; December: USD 700/t). Stocks at SHFE designated warehouses are increasing, with 335kt of pulp on warrant in SHFE warehouses and 38kt at pulp factory warehouses, which are record highs. NOREXECO pulp futures for CY Q4 21E imply a 6-7% decline in Europe vs. a 1-8% decline in China.
- CWF leads graphic paper gains, up 1% w/w: After factoring in a 30% discount to list pulp prices, the CWF/HW spread just remains in the green at EUR 19/t (UWF margin EUR 188/t). EURO-GRAPH released August demand stats recently. European CWF demand was up 16% y/y (+4% m/m), while European shipments increased by 32% y/y (+3% m/m). European UWF demand was up 3% y/y (+2% m/m), while European shipments increased by 9% y/y (+1% m/m). In the US, AF&PA recently released the September graphic paper stats. US CFS purchases increased by 15% y/y (imports were up 50% y/y, while exports were down 3% y/y), while inventories reduced by 4% m/m. In terms of US UFS, shipments decreased by 8% y/y (imports and exports were up 31% and 19%, respectively). US mills are reportedly sold out. October CFS prices were stable; however, Sappi, Verso and other key CFS producers have announced price increase of up to 8% from November.
- Containerboard in the green, with kraftliner up 1% w/w: In the US, AF&PA recently released the Q3 21A containerboard stats. Q3 production in the US increased by 9% y/y (YTD: +7%), while exports increased by 10% y/y (YTD: -15%). Operating rates increased q/q by 290bps to 95.6%. October containerboard prices were stable; however, box producers are implementing 8-9% price increases following the August containerboard price hikes. Q3 corrugated box shipments were flat y/y (-1.6% q/q) at 104bnft2 but YTD it is up 3.9% (RISI estimate: 4-4.5%).
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