• Mixed moves for pulp prices: NOREXECO pulp futures for 24E infer the pulp rally is complete in China, with some upside for prices in Europe (hardwood +7% & softwood: +4%). Suzano and Eldorado have announced further BEK price increases ($10/t in China and $80/t in Europe and North America). PPPC statistics for November revealed that global pulp shipments increased by 8.3% y-o-y to 4.722Mt (October 4.481Mt: +5.4% m-o-m). Global market pulp producer stocks decreased by one day-of-supply to close at 40 (October: 41), while the shipment-to-capacity ratio jumped 700bps to 92% (November 2022: 88%). EUROPULP statistics for November saw woodpulp stocks easing by 2.3% m-o-m to 1.22Mt (-8.6% y-o-y).
  • Textile prices mostly stable: The VSF op. rate was stable at 89% and VSF inventory days edge down, now 11.5 (from 5 last week). The theoretical VSF margin for Chinese producers was roughly flat at -$95/t.
  • DP prices stable across all grades: The spot imported hardwood DP remained stable at $880/t, and the DP/pulp spread is $227/t. The domestic DP price was flat at ¥7,360/t ($1,046/t, a $146/t premium to imports) and production at Chinese DP mills was stable.
  • China will keep zero import tariffs on major P&B grades in 2024: China has again temporarily waived the standard tariffs of 5-6% on imports. This is a surprising move considering ample domestic supply across most grades. Meanwhile, virgin fibre-based unbleached kraftliner, bleached and unbleached kraft paper, and newsprint have again been excluded from the tariff cuts (2-5%). China Customs data reveals that recycled linerboard imports jumped 68% to 3.55Mt through November.
  • Graphic paper prices in Europe ease around 1%: Burgo is stopping LWC and mediumweight coated paper production at the Duino mill in Italy, since the management of the plant was transferred to Mondi as of 1 January.
  • Containerboard stable, with further project delays confirmed: In light of weak market conditions, Heinzel has again postponed the PM 11 conversion at its Laakirchen mill in Austria until 2025. The PM will continue producing supercalendered (330Kt/yr) paper there until the end of 2024. The machine parts for the conversion of PM 11 to testliner production (550Kt/yr) are currently being delivered. Assembly will take place at the beginning of 2025, with the subsequent start-up of containerboard production. PM 11 has a production capacity of of SC paper. In the US, IP has closed 695Kt/yr of unbleached kraft linerboard in Orange, Texas.
  • The Middle East Paper Company (MEPCO) is set to double its containerboard and tissue capacity in Saudi Arabia: MEPCO has increased the company’s capital by issuing c.20mn ordinary shares at an offer price of SAR 31.50/share, with the Public Investment Fund now owning 23.08% of the company after the capital increase. The net offering proceeds (SAR 620mn) will be used to accelerate strategic growth initiatives including the PM5: 400Kt/yr containerboard; TM6: 60Kt/yr tissue and M&A to forward integrate into the manufacturing and supply of corrugated boxes. In other news, MEPCO is set to increase prices for all P&B products by $70/t from 1 January.
  • Mondi General Meeting next week to be held on 15 January: To vote on the proposed special dividend and associated share consolidation that is subject to shareholder approval.

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