• Finnish mills can now resume production, following the end of the strike on 8 April (initially launched on 11 March): The mills can be restarted when raw material is again available and shipments from the ports to customers begin.
  • Pulp prices continued to increase further by 1-2% this week: European pulp supply has been made even more tight (first the strikes) following an explosion in the evaporation unit at Metsä Fibre’s3Mt/yr pulp mill in Kemi, Finland, which has taken the plant offline for an estimated 10-12 weeks while repairs are carried out.
  • The VSF price was flat to lower with less market confidence this week, while the ICE cotton contract slumped 6%: The trading mood was generally moderate as spinners replenished a few stocks to meet the minimal requirements, so there was less fresh business. The VSF op. rate was stable at 82%, while VSF inventory days ticked up to 13.5 days (from 13.0 last week). The theoretical VSF margin for Chinese producers weakened to -$58/t (from -$46/t).
  • The dissolving pulp market continued to stagnate without smooth sales this week (BEK producers announced another $80/t increase for April): In the Chinese market, Sun Paper maintained normal production, and Hunan Juntai was temporarily producing paper pulp. The spot imported hardwood DP is now $942/t, and the DP/pulp spread is $257/t. The domestic DP price too edged up slightly to ¥7,660/t ($1,057/t, a $117/t premium to imports).
  • Paper packaging grades see more positive momentum: Kraftliner edged up 1% (-1% y-t-d), while testliner too increased by 1% (+6% y-t-d). Meanwhile, wastepaper (OCC) jumped 5%, now up 10% y-t-d. In other news, the European Commission has approved the merger between Smurfit Kappa Group and WestRock as it would not raise competition concerns, given the companies’ limited combined market position resulting from the proposed transaction. DS Smith has announced an agreement with Jonsac to source sustainable paper bags for e-commerce customers in Europe. American Forest & Paper Association February 2024 statistics revealed that y-t-d US kraft linerboard export shipments totalled 699Kt through and were up by 53% y-o-y.
  • Sack kraft paper prices up moving into Q2: In Europe, prices for unbleached paper rose by €50/tonne and bleached paper rose by €50-80/t. According to RISI, converters and producers alike believe this is the first of multiple increases this year.
  • Mixed moves for graphic paper prices in Europe: Coated mechanical paper softened by 1% (-5% y-t-d), while uncoated woodfree paper ticked 0.5% (+2% y-t-d) and coated woodfree paper increased by 1% (-1% y-t-d). Meanwhile, Lecta is set to increase coated woodfree prices by €50/t for deliveries from May 6, 2024. This is on the back of sustained inflation in paper manufacturing costs.

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