Global fiber supply is likely to continue to lag throughout 2022 due to logistical bottlenecks. This applies to both existing mills and new projects, according to the director of commercial pulp and people and management at Suzano, Leonardo Grimaldi. In the short term, the company expects plant stoppages to be above the historical average, due to the energy crisis and the difficulties of global shipping.
Pulp inventories are currently below normal levels. On the demand side, there is an opportunity to replace fibers and materials of fossil origin, such as plastic, sustaining the optimistic outlook for pulp.
In the executive’s view, the fundamentals of the pulp market will remain positive in Europe in the short term. In North America, demand will remain healthy.
“In China, we recognize less visibility because the macroeconomic scenario is more challenging,” said the executive, in a conference call with analysts, noting that Chinese demand for pulp was below expectations between July and September.
Announcements of paper price increases and reduction of pulp inventories in Europe contributed to the good performance of the pulp business.
The direct cost of pulp, according to Aires Galhardo, the company’s pulp operating director, was affected in the third quarter mainly by the appreciation of commodities. For the current quarter, a stable cash cost is expected, excluding maintenance stoppages. In the last quarter, this cost was R$ 711 per ton (about $128 at current exchange rates), an increase of 19% compared to 2020 and 5% compared to the second quarter.
In the paper business, market conditions have recovered strongly and have already returned to pre-pandemic levels, according to Suzano’s Director of Paper and Packaging, Fabio Almeida. In the case of packaging paper, growth is higher than the volumes seen before the pandemic.
“In the short term, we see the contribution of positive seasonality and we will continue to look for alternatives to mitigate the effects of the logistical crisis,” he concluded.