Pulp News

Pulp prices continue to rise in the international market

Faced with a worsening imbalance between supply and demand, the market should remain tight in the short term

With all the readjustments announced for April already implemented, pulp prices continue to rise in the international market, in the face of a worsening imbalance between supply and demand – a scenario that should remain in the short term, according to the commercial director of pulp and people and management from Suzano, Leonardo Grimaldi. “The fundamentals are still pretty solid, especially on the supply side,” he says.

The net hardwood price rose by another US$1.90 in the Chinese market to US$783.61 per ton, approaching historic levels. The appreciation has already exceeded 35% since the beginning of this year. In the case of resale, prices for eucalyptus pulp are higher than those charged for imports, at US$ 807.04 per ton, according to BTG Pactual, a Brazilian investment bank.

Softwood was already being traded at US$976.69 per ton in China, with a slight drop of US$ 0.50. Thus, the spread between the two types of fiber was at US$193 per ton, above the normalized levels, which were around US$ 120 per ton.


Global difficulties, such as problems in logistics chains, are limiting the global supply of raw materials in 2022. “Challenging logistics is one of the main factors. There were already challenges in 2021 and the outbreak of covid-19 in China aggravated the situation”, points out Grimaldi.

In addition, the concentration of maintenance stoppages at factories in South America in the first quarter, the delay in the start-up of operations of the Arauco and UPM projects and non-recurring events, including strikes, aggravated the scenario.

If, historically, unscheduled stoppages in production lines removed 700,000 tons of fiber per year from the market, this year the volume could exceed the 2 million tons per year that were no longer manufactured in 2020 and 2021.

Although supply remains limited, demand for the raw material in North America and Europe remains strong. In the European market, the prolonged strike that closed UPM’s pulp and paper mills in Finland caused papermakers in other countries to raise their operating rate, in an attempt to occupy the market that was served by the Finns. On the other hand, the war in Ukraine and the sanctions against Russia affected the supply of pulp by Ilim and the access to Russian wood, used as raw material by Finnish producers.

In the Asian market, local contacts suggest that stocks of eucalyptus fiber at customers and traders are at “extremely low” levels. The point of attention, however, is the possible impact of the pandemic on the Chinese economy ahead and the war in Ukraine on the global economy.


In a recent report, analysts Rafael Barcellos and Arthur Biscuola, from Santander, argue that pulp markets should remain tight this year, with an estimated deficit of 400,000 tons of hardwood. “Demand remains strong in Europe and, in China, sentiment has improved since October, with paper prices following the recent pulp rally,” they wrote.

Bottlenecks in global logistics chains also contribute to keeping fiber prices at high levels, with no expectation of normalization in the short term. “We believe that a prolonged upward cycle for cellulose is likely”, they added.


The world’s largest producer of eucalyptus pulp, Suzano applied readjustments from US$ 50 to US$ 100 per ton as of April in all markets – North America, Europe and Asia.

Grimaldi points out that the company still has no volumes available to offer on the spot market and saw the negotiations for April be brought forward by customers for fear of running out of the intended quantities of fiber. “We are focused on serving long-time customers,” he says. Despite this context, there is still no discussion about new adjustments in May.

Valor Econômico
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