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Wood shortage should put a brake on new pulp mills

According to Suzano, South America should not announce new projects beyond those already planned, due to the scarcity of raw materials

For Suzano, the shortage of wood in South America should stop announcements of new factories or expansion projects for hardwood pulp, in addition to those that are already scheduled to hit the market soon. Some of the ongoing projects include the company itself, which is building a new factory in Ribas do Rio Pardo (Brazil), with an investment of R$ 19.3 billion. In addition to this, Arauco confirmed an investment of R$ 15 billion in a new unit, also in the Brazilian state of Mato Grosso do Sul.

“Our vision is that there is no wood for new projects in the short term in the region”, stated the company’s president, Walter Schalka. According to the executive, with the great demand for the input, there would be no conditions for the implementation of another large line between 2024 and 2028.

According to Suzano’s pulp commercial and management and people director, Leonardo Grimaldi, on the global supply side, the volumes of the units that recently entered into operation – Arauco’s MAPA Project and UPM’s Paso de los Toros mill – will gradually reach the market, probably with more strength in the second half.

In the part of the global short fiber demand, the company projects an organic growth of around 1 million tons, which should generate a “healthy” balance between supply and demand in the short term.

For Grimaldi, as pulp prices approach the box cost of production, mainly Asian consumers will accelerate the recomposition of fiber stocks. “Consumers anticipated the new offer and this is putting pressure on the price curve. But the increase in costs also raised the marginal cost of the industry”, said the executive.

Source
Valor Econômico
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