Research

Key message: Profitability impacted by unusually high maintenance and strikes in Finland. Graphic paper volumes were lower after restocking in Q1 and UPM is set to reduce their graphic paper footprint by 12%, equal to 610Kt/yr. Their paper margins came under pressure as fibre cost increases materialised quicker than paper price increases.

Key message: UWF paper showed continued signs of a rebound and Navigator expects the structural increase in producers’ cost base to sustain paper price levels in Europe at higher levels. New pulp supply to largely impact pulp prices in 2025 and H1 saw a reduction in the dependency on the paper bag segment, with a tilt towards flexible packaging.

Key message: Nordic Paper’s recent results indicate another strong performance, with management anticipating further improvements in the third quarter despite higher pulpwood costs. The demand for kraft paper was robust during the quarter, with prices up over 8% QoQ (positive read-through for Mondi).

Key message: Improved pricing across most grades more than offset sequentially higher costs. Pulpwood costs continued to increase and reached an all-time high and are expected to rise further. North America had a strong performance (positive read-through for Sappi North America), where the company expects to maintain a graphic paper presence well into the 2030’s. In Europe, kraft paper and containerboard (strong demand for fluting) sales improved sequentially (positive read-through for Mondi). Billerud expects a slight improvement in market conditions heading into the third quarter.

Key message: OCC cools down after a long positive streak while containerboard prices increase further. Spot DP is now $950/t, while a fire and subsequent explosion occurred on a supplier truck delivering liquid oxygen to the Sappi Saiccor Mill. Week ahead: The Navigator Company reports results next week Monday. UPM reports on Tuesday. Stora Enso, International Paper and PCA report on Wednesday. SCA reports on Friday.

The second quarter witnessed continued momentum for pulp prices in both Europe and China, though this now appears to be easing. The dissolving wood pulp price saw an improvement of 4%, while the VSF price remained stable. In contrast, graphic paper prices experienced limited movement. Encouragingly, containerboard producers in Europe managed to increase their prices by 6-10%.