• Pulp prices under pressure in all key regions this week: The Pulp and Paper Products Council (PPPC) reported World-20 market pulp stats for September last week. China demand remains weak, while Europe continues to surprise to the upside. Global pulp producer stocks declined by 3 days-of-supply to 44 in September (BSK: -1 day to 45 and BHK: -4 days to 45). Global market pulp shipments were 4.587mt in September, up 10.7% m/m but down 4.6% y/y (SW: +2.9% m/m & -6.8% y/y; HW: +19.9% m/m & -4.0% y/y). The shipment-to-capacity ratio increased to 94% vs. 83% in August (Global pulp shipments: North America +2.7% m/m & -3.8% y/y; China:  +17.4% m/m & -16.6% y/y; Europe: +11.9% m/m & +5.4% m/m). NOREXECO pulp futures for Q1 21E imply a 11-17% decline in Europe, while prices in China are now expected to be stable.   
  • Graphic paper in the green across the board, with CWF leading gains (+3% w/w): After factoring in a 30% discount to list pulp prices, the CWF/HW spread doubles this week to EUR 38/t (UWF margin EUR 188/t).
  • Containerboard reaches new highs: Testliner lead gains this week (+2%), followed by kraftliner (+1%). SCA intends to increase kraftliner prices by EUR 50/t from 1 December, siting limited kraftliner supply currently. There was slight pressure on PfR and we note that export prices from the US and Europe to Asia are down 5% in the past two weeks. Further pressure on US OCC prices is likely given seasonally weaker months of November and December. Lower OCC prices coupled with WestRock expecting Q4 box shipments to be flattish y/y, could mark the beginning of lower containerboard prices in the US.

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