Global pulp prices drop amid tariffs

Increased tariffs imposed by U.S. President Donald Trump have shaken global markets and directly impacted demand for pulp, particularly in the United States and China. This turbulence ended the price uptrend observed since the beginning of the year.

According to Fastmarkets’ Foex index, the net price of short-fiber pulp in China dropped by US$77.90 over the past month, reaching US$517.47 per ton last week. Market sources report resale negotiations below US$500 per ton, not yet reflected in official indices. If confirmed, this would mean a more than 20% decline from the April peak, about US$120 per ton.

Suzano, the world’s largest producer of short-fiber pulp, had been implementing monthly price hikes of US$20 in Asia since January, taking advantage of a more favorable start to the year. While the increases held through March, April brought challenges in maintaining the trend.

Market instability halted price transfers and reversed gains from the first quarter. The current price level is “unsustainable”, according to Leonardo Grimaldi, Suzano’s Executive Vice President of Pulp Commercial and Logistics, during a recent earnings call. He expressed hope for a return to normal market conditions by May.

Still, Fastmarkets projects weaker prices in the coming months, with recovery only expected at the end of the year. “If global demand, especially in China, continues to grow, it could support a price rebound later this year,” said Rafael Barisauskas, Latin America economist at the consultancy.

Other factors also contribute to the challenging outlook. Since last year, supply-demand dynamics have been disrupted by the reactivation of Chinese producers and the addition of new capacity, including Suzano’s Cerrado Project, which began 2025 at full annual capacity of 2.55 million tons, ahead of initial expectations.

 

Barisauskas notes that uncertainty in demand from Asia and the U.S. is prompting buyers to purchase on a short-term basis, avoiding inventory buildup throughout the supply chain and slowing pulp consumption.

April data from the Pulp and Paper Products Council (PPPC), compiled by BTG Pactual, show stock levels rising to 44 days (47 for short-fiber and 41 for long-fiber pulp), with operating rates at 80%, considered idle by the bank.

Despite pressure, total shipments rose 2% year over year, driven by a 15% increase in Chinese demand. In contrast, Latin America saw a 9% decline.

Following first-quarter earnings, Suzano CEO Beto Abreu noted that demand hasn’t shifted significantly but acknowledged a cautious outlook. During a May press briefing, CFO Marcos Assumpção addressed speculation about production cuts, saying the company is monitoring high-cost operations but plans to sell everything it produces.

Another concern is the potential redirection of Chinese exports to markets outside the U.S. “China may face difficulties exporting short-fiber pulp to the U.S. The big question is whether Chinese producers will absorb this output or export it elsewhere,” said Klabin CEO Cristiano Teixeira during a call.

For long-fiber pulp, Teixeira sees a more favorable situation, as most of China’s imports come from the U.S. “Any global producer of long-fiber pulp could become a supplier alternative for China, Brazil included,” he added.

Despite the adversity, Brazilian diplomat José Carlos da Fonseca, president of Empapel and international relations director at Ibá, believes it’s still too early to determine if the current pressures represent a lasting trend.

This month, the U.S. and China agreed to reduce reciprocal tariffs from 125% to 10% for 90 days while negotiations continue. “We may be at the peak of this cycle, but the world will not be the same, even once this period passes,” da Fonseca said.