• May 2022 average price changes (Europe unless otherwise stated): NBSK pulp +2% m/m; +15% y/y; +10% vs. 2021 average. BHKP pulp +4% m/m; +23% y/y; +17% vs. 2021 average. China BHKP net pulp +4% m/m; +4% y/y; +7% vs. 2021 average. China NBSK net pulp +7% m/m; +0% y/y; +6% vs. 2021 average. LWC +8% m/m; +78% y/y; +48% vs. 2021 average. CWF +9% m/m; +73% y/y; +42% vs. 2021 average. UWF +6% m/m; +46% y/y; +29% vs. 2021 average. Newsprint +5% m/m; +88% y/y; +58% vs. 2021 average. US CFS +8% m/m; +37% y/y; ++12% vs. 2021 average. Kraftliner +3% m/m; +38% y/y; +26% vs. 2021 average. Testliner +5% m/m; +45% y/y; +28% vs. 2021 average. OCC +2% m/m; +15% y/y and +15% vs. 2021 average.        
  • Norske Skog share price increased the most (+13% m/m) in May and is now up 54% YTD: Other top gainers included Suzano (+8%); CMPC (+8%); Klabin (+7%) and IP (+7%). Top losers included Grasim (-16%);
    Mercer (-8%); SCA (-8%); Billerüd (-8%); DS Smith (-7%); Smurfit Kappa (-6%); Mayr-Melnhof (-5%) and Stora Enso (-5%). Mondi was up 1%, while Sappi was down 2%.
  • In terms of EV/EBITDA multiples, Sappi and Mondi are both trading at the biggest discounts vs. peers (based on Bloomberg consensus): On a 1-yr rolled fwd. EV/EBITDA (x), Sappi is trading at 3.4x (34% discount to its 5-yr average) and Mondi is trading at 5.4x (27% discount to its 5-yr average).
  • Europe pulp prices rise further: NOREXECO pulp futures for CY 23E imply a 13-21% decline in Europe, and a decline of 13-17% in China. Chinese pulp prices take a breather despite restricted availability due to ongoing supply-side disruptions. Chinese customers, particularly major end-users are holding back on purchasing NBSK imports. Despite the easing of lockdowns and the ramping-up of production in China, there are no signs that depleted pulp stocks will be replenished. In North America, Resolute, Suzano, Eldorado set an USD 60-100/t BHK price increase as hardwood tightens; NBSK and fluff rises also set. Suzano, Arauco and Eldorado have also set an USD 50/t European price hikes and USD 30/t net hikes in China/Asia. Arauco continues to assess damage at its Valdivia DP mill.
  • Graphic Paper prices stable: After factoring in a 30% discount to list pulp prices, the CWF/HW spread decreases to EUR 269/t (UWF margin reduces to EUR 378). Suzano has announced an 8% price increase for UWF in Europe from 1 July.
  • European WT kraftliner extends gains, up 1% w/w: The kraftliner/testliner spread increased by 2% w/w to
    EUR 163/t. The testliner/OCC spread is stable at EUR 584/t. OCC prices increased by 2% m/m in May. This is on the back of strong demand, low availability, continued transport problems and further pulp price increases.
  • More kraft paper prices increases announced in North America: Canadian Kraft Paper has announced an USD 77/t increase from 1 July. This follows price increases from WestRock and Canfor Pulp and Paper. Unbleached kraft paper demand has partly increased from the production of paper envelopes for e-commerce.
  • Russian insights: Russian testliner prices came under pressure in May. Kraftliner is expected to follow suit in June. This is on the back of slowing consumer activity impacting demand for corrugated packaging and no testliner exports. Unbleached kraftliner and semi-chemical fluting prices remained at RUB 70k/t and RUB 66k/t, respectively, in May, while white-top kraftliner held steady RUB 84k/t. High-quality testliner fell below RUB 55k/t. Despite this, testliner margins remain robust as OCC prices have dropped to RUB 9,5-10k/t (collections become unprofitable when OCC reaches RUB 6k/t).
  • Mondi news flow: EW Technology’s mechanical engineering knowledge has been combined with Mondi’s paper packaging expertise to enable companies to wrap pallets in Advantage StretchWrap paper. The new machine extends the possibilities for companies wanting to replace plastic pallet wrapping with a recyclable and renewable paper solution. The machine takes a full reel of Mondi’s Advantage StretchWrap paper, allowing customers to replace the multi-layer plastic which is currently the industry standard for pallet wrapping. Advantage StretchWrap is 100% virgin paper, created with renewable materials and fully recyclable in existing paper waste streams across Europe. It contains no plastic or coating, but still ensures excellent strength and tension absorption. Mondi commissioned an independent life cycle assessment comparing the innovative paper pallet packaging to conventional plastic stretch film and proved that it performed better in several impact categories – most notably in climate change, with a 62% lower carbon footprint than virgin plastic stretch film.
  • Peer news flow: Stora Enso has confirmed availability of its new 100% virgin fibre-based kraftliner AvantForte WhiteTop. The white top kraftliner targets demanding premium segments, such as fresh food, e-commerce, and shelf-ready packaging.

Download Report (13 Pages)