Report by ERA Research

European consumer softwood pulp inventories plummeted from a peak of 32 days of supply in March to 24 days in June/July, undoing inventory accumulation since late 2024. The analyst emphasizes that while NBSK prices remain at unprofitable levels despite robust European downtime from producers like Metsä and UPM, the cushion of sky-high consumer inventories has clearly reversed. Tighter European NBSK supply should support improving prices over time, with consumer restocking expected to drive the next upcycle. Mill inventories remain elevated, but incremental volumes could shift to hardwood as producers substitute furnish. Tighter conditions would provide a tailwind for UPM’s Fibres North group and Mercer’s German mills. On trades, there is no significantly NBSK-leveraged investable equity in the coverage universe, but higher prices would aid Mercer’s bondholder discussions, benefit Domtar ahead of large maturities, and deliver knock-on gains to Suzano.

Report by ERA Research

ERA Forest Products Research released their latest report on ESG commitments, progress and gaps for pulp, paper, packaging and tissue companies. Within the sphere of pulp producers, Mercer and Sappi are cited as examples of companies with strong disclosure and targets. In European paper, pulp and packaging, ambitious targets appear common but data and disclosures are healthy, with firms including UPM and Billerud mentioned. In the packaging, paper and tissue industry, WestRock appears to lead the way, with Graphic Packaging also referenced as having good targets that could spur near-term action.