• Paper pulp prices continue to gather momentum in China and Europe: Hardwood prices in China edged up 1% further, while softwood was stable. However, the recent weakening of BSK futures could be an early sign of demand weakening in China. For instance, tissue operating rates in Baoding have dropped to 50-60% with tissue prices falling. Meanwhile, hardwood increased by 1% in Europe, while softwood was flat. NOREXECO pulp futures keep edging up and for 24E imply a healthy improvement for hardwood (+12%) and softwood (+5%) pulp prices in Europe, while prices in China are expected to remain stable from current levels. Eldorado has announced a BEK price increase of $80/t in Europe and North America and $20/t in China. In other news, PPPC statistics for October revealed that global pulp shipments fell by -12.7% m-o-m to 4.484Mt (+4.6% y-o-y), with inventories rising to 40 days of supply (September: 39). The shipment-to-capacity ratio fell to 85% (September: 100%).
  • Mixed moves for Textile prices in China (VSF and cotton flat, while polyester edged up 1%): The VSF op. rate jumped to 90% (85% last week) as some VSF units came back online from maintenance. VSF inventory days edged up slightly to 5 (from 10.0 last week), still well below the historical average of around 20 days. Meanwhile, the theoretical VSF margin for Chinese producers was stable at -$45/t (from -$44/t last week). The Lyocell market softened with the operating rate slightly down to 82% (83%).
  • DP prices continue to gain traction: The spot imported hardwood DP is now trading at $890/t, and the DP/pulp spread is $275/t (from $297/t last week). The domestic DP price too edged up 1% to ¥7,600/t ($1,047/t, a $162/t premium to imports). In the Chinese market, Sun Paper was producing dissolving pulp steadily, while there was maintenance at its Laos-located plant. Meanwhile, Hunan Juntai came back on stream from maintenance and was producing paper pulp but plans to switch back to dissolving pulp next week. In other news, Rayonier Advanced materials (RYAM), the world’s largest producer of high-purity cellulose (specialty DP) will be optimising the production of commodity DP and specialty DP in 2024 following Georgia-Pacific’s planned closure of its 513Kt/yr fluff and specialty DP mill. This will lead to a net reduction of specialty DP production of 59Kt/yr and a net increase of commodity DP of 59Kt/yr across RYAM’s mills.
  • Graphic paper prices take a breather, while CWF producers follow UWF producers with price hikes slated: To address ongoing cost inflation, Sappi Europe is set to increase prices for Fine Paper grades by 7-10% from January 2024. Meanwhile, Lecta is set to increase all CWF and UWF paper grades by 7-9%, effective January 2024.
  • Containerboard prices were stable this week, even though industry players continue to flag weak demand and excess testliner capacity: According to industry participants, the recent weakness in containerboard prices formalized that discounting has been taking place (flagged in Norske Skog’s recent Q3 23A results), having first started in Poland. The kraftliner/testliner spread remains elevated at €189/t and OCC too was stable this week following ten consecutive weekly increases.

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