Pulp sellers blink in China

ERA Research

Pulp prices in China have been rangebound since early June, with Chinese buyers and sellers locked in a standoff. Given the huge week over week PIX China pulp price changes (chart), the producers have blinked first. PIX prices dropped $48 and BHK fell by an astounding $91, a correction of a magnitude that would usually take weeks to occur. Expect other international markets to see accelerated price drops as a result. The biggest market-pulp consumers are tissue producers and in ERA’s stock coverage Cascades is expected to benefit the most. Pulp producers are the losers, including Mercer International and International Paper. Expect pulp names to remain under pressure for at least a quarter, or until closures accelerate. ​​

- 09 August, 2024