A new round of pulp price increases for June is on the radar in China, due to restrictions on the supply of the commodity, scheduled or unscheduled stoppages in factories around the world and the continuity of logistical bottlenecks that limit international trade.
In the last week, both prices for resale of eucalyptus pulp in the Chinese market and long fiber futures contracts rose again, indicating potential readjustments.
The appreciation in the resale of eucalyptus pulp was US$ 34.20 per ton, reaching US$ 850.27. At the same time, the fiber was practically stable in the Chinese spot market, with a slight gain of US$ 0.40, to US$ 812.29 per ton – almost US$ 40 below the resale price.
In the long fiber market, the situation seems more balanced. On the Shanghai Stock Exchange, futures contracts advanced 1.2% in the week, equivalent to US$ 954.79 per ton of imports. In the Chinese spot market, the net price had a slight decrease, from US$ 0.80, to US$ 987.33 per ton – above, therefore, the values indicated by the futures contracts.
The spread between the fibers can support a new readjustment of the short fiber. With long fiber more expensive, papermakers tend to migrate consumption to raw material with more attractive prices, increasing demand.
The combination of limited pulp supply, firm demand and logistical restrictions that cause delays in delivery in the Chinese market sustains the commodity’s appreciation. The war in Ukraine, sanctions on Russia and strikes in different regions reflect on the trade of wood and other inputs of the pulp and paper industry, affecting the availability worldwide.
In early May, Suzano, the world’s largest pulp producer, announced increases in China. Klabin, which had already communicated the increase to the Chinese market at the end of April, indicated that all readjustments for May were being applied in full.
The net price of short fiber pulp in China has increased by 42% since the beginning of the year.
The perception of Brazilian producers is that the supply in the global market tends to be even tighter this quarter, supporting the price rally. Between January and April 2022, according to an estimate by Suzano, more than 1.5 million tons of fiber left the market due to unscheduled stoppages – a value above the historical average.
