Fastmarkets RISI Global Paper Packaging Outlook

  • Softwood pulp prices under pressure in both Europe and China: In China, P&B demand remains poor due to electricity shortages, thus reducing pulp demand. US spot pulp prices continue to decline as the usual seasonal uptick has failed to emerge, coupled with less maintenance-related shutdowns. NOREXECO pulp futures for
    Q1 21E imply a 11-16% decline in Europe vs. a 1% increase in China.
  • Graphic paper gains further ground (CWF & CM +1% w/w): After factoring in a 30% discount to list pulp prices, the CWF/HW spread increased by 19% w/w to EUR 46/t (UWF margin EUR 188/t). According to RISI market contacts, both the uncoated and coated mechanical paper markets are reportedly fully booked until at least the end of the year with lead times in some cases reach February-March, particularly on the coated side. In 2022, the magazine paper market is expected to remain tight at least during H1 22E, but difficult to estimate how much demand will drop because of the price increases. In Brazil, Suzano has announced a 19% CWF price increase (1 December) and a 13% UWF price increase (1 January 2022).
  • Containerboard reaches another record high: Testliner leads gains again this week (+2%), reaching another new high of EUR 680/t. The OCC price was flat w/w. At the recent 2021 International Containerboard Conference, SKG indicated they anticipate OCC prices to rise along with demand. “There is not enough fibre coming into the system….As the world keeps growing, and OCC becomes more in short supply, OCC will continue to go up in price”.

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