- Second quarter 2024 price snapshot: Pulp prices saw substantial double-digit increases in both Europe and China during the second quarter of 2024. Hardwood prices experienced notably higher increases compared to softwood. In Europe, hardwood prices increased by 31% QoQ and 35% year-on-year YoY, while softwood prices rose by 14% QoQ and 17% YoY. In China, hardwood prices increased by 11% QoQ and 35% YoY, and softwood prices rose by 9% QoQ and 10% YoY. There was limited movement in graphic paper prices during the quarter. In Europe, coated woodfree paper rose by 1% QoQ but fell by 12% YoY, while uncoated woodfree paper increased by 2% QoQ and 12% YoY. In the US, coated freesheet paper remained stable during the quarter but decreased by 3% YoY. On the packaging front, European containerboard producers continued to achieve gains. Kraftliner prices rose by 6% QoQ but declined by 2% year-on-year YoY, while testliner prices increased by 10% QoQ and 1% YoY. Waste paper (OCC) saw a significant jump, rising 40% QoQ and 51% YoY. Sack kraft prices were much more subdued, with unbleached and bleached sack kraft up only 2% QoQ, and down 11% YoY and 4% YoY, respectively. In the US, solid bleached sulphate board prices softened by 2% QoQ and 9% YoY. On the textiles front, imported hardwood dissolving wood pulp prices rose by 4% QoQ) and 4% YoY. The VSF price. The VSF operating rate ended the quarter at 78%, with VSF inventory days at 9.
- Pulp prices stable across Europe and China: Softer pulp demand is China is now more evident with the China Customs statistics revealing a 12% YoY (-11% MoM) slump in pulp imports. Accordingly, pulp producers appear to be tempering expectations with stable prices for July business, with price increases withdrawn. Arauco has flagged maintenance at its MAPA Project in Chile and will reduce hardwood allocation to China by 50%. In contrast, EUROPULP statistics for May too saw woodpulp stocks slumping by 30% YoY (+5% MoM).
- Mixed fortunes for textile prices this week: Polyester and the ICE cotton contract both increased by 4% and 2% respectively, while the ZCE contract decreased by 1%. The VSF market held steady this week but there was still positive sentiment. The VSF operating rate remained the same at 84%. Meanwhile, VSF inventory days decreased slightly WoW to 8 from 8.5, and the theoretical VSF margin for Chinese producers strengthened slightly to -$50/t (from -$53/t last week).
- The imported dissolving pulp price remained unchanged with suppliers showing less enthusiasm for additional price hikes: The spot price for imported hardwood dissolving pulp remains at $942/t, with a DP/pulp spread of $201/t. The domestic DP price was stable at ¥7,660/t ($1,052/t), reflecting a $110/t premium over imports. In the Chinese market, two large-scale Chinese pulp mills were still producing dissolving pulp.
- Further momentum for containerboard producers in Europe: The kraftliner price edged up 1%, while the white-top kraftliner price rose by 2%. The testliner price was stable, while OCC edged up a further 2% to €166/t. The Smurfit WestRock deal has been finalised, with trading on the NYSE to commence on Monday July 8. In other news, Mondi has now completed its €125mn containerboard upgrade at its Kuopio mill in Finland. This expansion increases capacity by 55Kt/yr.
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