• Pulp prices rise further in all regions: NOREXECO pulp futures for CY 23E imply a 15-21% decline in Europe, and a decline of 12-19% in China. SCA is set to increase prices for NBSK by c.3% to USD 1,485/t.
  • Graphic Paper prices gain further ground: After factoring in a 30% discount to list pulp prices, the CWF/HW spread decreases to EUR 268/t (UWF margin reduces to EUR 366/t). Burgo set to increases CWF and UWF prices by 6% from 1 July in Europe and overseas markets.                                                                                                                                                           
  • Containerboard prices stable, while OCC extends gains, up 1% w/w: The kraftliner/testliner spread is stable at EUR 163/t. The testliner/OCC spread moderates slightly to EUR 582/t. In the US, OCC prices ended its 8-month pricing decline, with prices holding steady. In the US, the AF&PA reported April kraftliner stats, which indicated exports increased again in April (331kt vs. 366kt in March), with YTD exports now up 12.4% to 1.32mt.  
  • European 2021 & Q1 22A sack kraft stats: The European paper sack industry delivered 4.8% more paper sacks than in 2020. Moves for sectors with the biggest market share: cement (+3.4%), building materials (+8.2%) and food products (+3.0%). The highest gains were recorded in minerals (+13.6%) and chemical products (+9.3%). 2022 has started well with a 3.9% y/y increase in deliveries in Q1 22A.
  • Peer news flow: Various upgrades to earnings guidance has started filtering through in the past two weeks. UPM has raised its earnings outlook for H1 22E and FY 22E as strong market conditions have continued in all UPM’s businesses. UPM has upgraded guidance from in line with previous year to now expecting an increase y/y. Stora Enso has raised guidance for FY 22E EBIT, now expecting EBIT to be higher y/y (instead of in line). The strong underlying demand and commercial momentum has continued across all six of its divisions (positive read-through for Mondi) and geographies. All divisions remain fully booked and there is still a tight supply and demand balance in many product categories. Stora Enso is also considering converting PM4 (one of two paper lines) at its Langerbrugge mill in Belgium from newsprint to testliner. The feasibility study is expected to be finalised in H1 23E, with production in 2025. The annual capacity would be 700kt of testliner and recycled fluting grades and would generate annual sales of c.EUR 350mn (at full capacity). The total investment for the conversion is estimated to be EUR 400mn (EUR 571/t). This conversion would improve Stora’s geographical footprint to include Western Europe in addition to its current focus in Eastern Europe (Poland).

Download Report