The financial market is projecting a reduction in the price of pulp in the coming years, which would directly impact the results of producers of the commodity, such as the Brazilian Suzano, and their actions. However, for Walter Schalka, CEO of the pulp giant, the dynamics of the sector are not so simple.
“There is a myopia in the financial market regarding the moment that Suzano is going through. It is inexorable that the global consumption of hardwood pulp increases monthly by 120 thousand tons”, said the executive.
However, investors’ projection points to an increase in supply with new projects underway, which supports the idea of falling prices.
For Schalka, supply will not be able to meet demand, as, in addition to the recurring monthly high caused by population growth and increased urbanization, inventories worldwide are at extremely low levels.
“I’m not saying that there will be no risk of volatility in pulp prices, but I can’t see the decoupling that is happening, because the price has never been so high and the share price in dollars is very low”, explained the CEO.
Other factors observed by the executive considered positive for the company’s performance include the move from the long fiber tissue industry to the short fiber one – which is Suzano’s specialty. “In addition to fiber to fiber, there is also fossil to fiber, so we are also gaining space from plastic. Our market will continue to grow”, declared Schalka.
The CEO also pointed to a possible downward price swing but looking at the swings since the beginning of the year, he does not believe that market speculation will materialize in the short term. “I don’t see the price going down right now,” he said.
According to the executive, given this scenario, Suzano follows a fundamental pillar: to maintain its financial strength. “We will manage our investment; share repurchase or dividend policies in accordance with market conditions. But what is non-negotiable is our financial strength. We will not give up on that”, concluded the CEO.
