- Paper pulp prices mostly stable and producers announce price increases in Europe and China: Pulp prices in Europe softened 1% but were stable in the US and China. NOREXECO pulp futures for 24E imply a healthy improvement for hardwood prices in Europe (+12%) and China (+6%). UTIPULP statistics for June saw European consumer pulp inventories rise by 1.3% m-o-m (+10.9% y-o-y), while consumption dropped by 5.2% (-25.2% y-o-y) and days of supply increased to 24 (+1 m-o-m and +5 y-o-y). Europulp statistics for July reveal that stocks of wood pulp in European ports remain elevated (+61% y-o-y), however dropped 14% m-o-m compared to the usual decline of around 3-5%. PPPC statistics for July saw producer inventories stable at 48 days-of-supply while shipments improved by 6% y-o-y to reach 4.55Mt (-7.3% m-o-m). The shipment-to capacity ratio closed at 86% (July 22: 84%), down from 96% in June. On the back of improved market conditions in Europe, Altri and the Navigator Company are looking to raise BEK pulp prices in Europe by $50/t from 1 September. Meanwhile, Arauco has raised prices in China by $20-30/t for radiata pine, USK and BHK.
- Textile prices in the green with cotton (+3-4%) and VSF leading gains (+1%): The VSF op. rate improved to 85% (81% last week) with the restart of some Xinjiang-based units. VSF inventory days edged down further to 11.5 (from 12.5 last week) to reach a two-year low. With September being the traditional peak season, VSF prices are likely to rise further. The theoretical VSF margin for Chinese producers improved and is now positive at $25/t (from -$1 last week). The Lyocell market was stable with prices flat and the operating rate around 70%. Meanwhile, Lenzing has successfully completed the conversion and upgrade (€100mn) of its Indonesian site to specialty viscose.
- Import dissolving wood pulp prices increase by $10/t (+1%): Imported hardwood DP is now trading at $850/t, while the DP/pulp spread eased to $307/t from $309 last week. The domestic DP price too edged up 1% to at ¥7,120/t ($969/t, a $129/t premium to imports). Hunan Juntai switched back to hardwood dissolving pulp production last week, and Sun Paper is currently producing paper pulp.
- Graphic paper prices in Europe continue to soften by 1-2% while UWF is stable: The CWF price continues to remain elevated vs. its historical average (+22% vs. 3-Yr; +35% vs. 5-Yr and +50% vs. 10-Yr). Despite this, Sappi Europe announced that it intends to keep CWF prices stable for the remainder of 2023. Meanwhile, the UWF price too remains elevated but to a lesser extent (+10% vs. 3-Yr; +18% vs. 5-Yr and +28% vs. 10-Yr). Following a strike on 15 July, UPM is set to restart its Blandin mill (286Kt/yr of CM) on 11 September. In other news, Norske Skog will restart production at its idled PM5 (SC magazine paper: 100Kt/yr) at its Saugbrugs mill.
- Containerboard prices stable while OCC dips 1% further: Following Pro-Gest’s recent results, the company confirmed that it has taken downtime at all of its testliner mills, with a total capacity of 1.065Mt/yr. Looking ahead, DS Smith is set to provide a trading statement at its AGM next week Tuesday at 9am (Conference call dial in details: +44 33 0551 0200).
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