• Despite slowing paper and board market in China, pulp prices stable for now: Restricted availability and low pulp stocks held by most customers have kept prices for pulp imports from declining in China. The domestic paper and board sector has continued to struggle with falling demand amid an ongoing economic slump. NOREXECO pulp futures for CY 23E imply a 14-19% decline in Europe, and a decline of 11-22% in China. PPPC reported World-20 market pulp stats for August 2022: Global pulp producer stocks increased by 1 day m/m to 43 days-of-supply (BSK: +1 to 44 and BHK: +1 to 44). Shipments +8% y/y & +6% m/m to 4.478mt (SW: +5% m/m & +6% y/y to 1.947mt; HW: +6% y/y & +11% y/y to 2.336mt). The shipment-to-capacity ratio improved to 88% in (July 22: 83%), and higher than August 21 (83%).
  • Graphic Paper extends gains: After factoring in a 30% discount to list pulp prices, the CWF/HW spread was up 10% w/w to EUR 211/t, while the UWF/HW spread increased by 5% w/w to EUR 350/t. AF&PA released the August 2022 Printing & Writing stats. This marks the first negative shipment print since October 2021. Negative read-though for Sappi with CFS purchases down 6% y/y. Imports increased by 37% y/y and exports increased by 10% y/y. Inventories were down 3% m/m. Sappi Europe to increase prices by 6-9% for coated mechanical reel products from October.
  • Containerboard prices stable but OCC down 13% w/w: US, European OCC prices continue to fall in Asia, with slowdown on the demand side. This is driven by a slowdown on the demand side globally, rather than to collection rates in the north hemisphere, which are usually higher in summer. The kraftliner/testliner spread was stable at EUR 167/t, while the testliner/OCC spread jumped 3% w/w to EUR 639/t. MEPCO to increase prices for all paper and board products by USD 50/t, effective October 1. Schoellershammer (550ktpa) to increase testliner prices by EUR 100/t from October 1 due to the increase to extremely high energy costs, as well as Germany’s gas price levy, the Gas-Umlage, which will take effect October 1. To adjust to the demand level, the company also plans to curtail some 25% of its production capacity in September, either through extended maintenance downtime or reduction of machine speed. In Italy, Pro-Gest’s 400ktpa Mantova containerboard mill remains offline after summer shut due to the extreme volatility of gas prices. The group plans to start the Mantova mill back up in the near term, when market conditions allow. In North America, containerboard prices held unchanged in September for the sixth straight month, even as demand seemed softer, and supply became more readily available.
  • SBS price increases are anticipated in September: North American boxboard prices increased by USD 20/t (to USD 1,480-1,520/t) for (SBS) folding carton and cupstock grades in September. Clearwater and Sappi are set to issue increases for the week of Sept. 19
  • Mondi news flow: New EUR 5mn R&D facility in Steinfeld, Germany: It will include pilot lines for both plastic- and paper-based solutions as well as an analytical laboratory and a customer experience centre. Mondi launches Hug&Hold, new sustainable paper-based alternative to plastic shrink wrap: Hug&Hold is a solution to wrap and transport PET beverage bottles. It’s a recyclable 100% paper-based solution, comprising 2 elements, a kraft paper sleeve & a corrugated clip.
  • Sappi news flow: Sappi Europe temporarily reduces capacity at Carmignano Mill in Italy due to the continuing and sharp escalation of energy costs. We note that Burgo has also taken downtime at its specialty mill in Italy. Sappi invests to extend wet-strength label paper production capacities at Gratkorn mill in Austria. As of the end of 2023, production capacities for label papers will be extended through a double-digit million-euro investment in technological innovations, such as a new embossing calendar, and enable the production of high quality wet-strength wet-glue label paper.

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