Pulp producers announce a new price adjustment in China for May

South American hardwood pulp producers have been increasing the prices of their products produced in China, informed Valor. According to market sources, Klabin announced a readjustment of US$ 30 per tonne to be applied from May 1 onwards, a move accompanied by Chile’s Arauco and Bracell.

As a result, short cellulose fibers will now be exchanged at US$ 810 in contracts invoiced to China beginning at the end of this month. Once this process is completed, prices will have increased by almost 45% since the end of December 2021.

A number of variables have conspired to keep prices surprisingly high for everyone, including producers. Working strikes, disruptions in the global logistics chain and specific locations, and factory maintenance shutdowns at a time of exceptionally high demand in North America and Europe all explain the recent increases.

Given that the situation seemed unlikely to alter in the immediate future, a new increase was already anticipated. Suzano, for example, indicated a readjustment of up to US$ 100 per tonne for April, which was fully implemented.

Furthermore, problems in global maritime transportation and regional logistics chains, such as the lack of wagons and available truck drivers in different regions, led to the emptying of pulp stocks and increased orders, aggravating the mismatch between supply and demand.

According to Fastmarkets Foex, the net price of hardwood in the Chinese market rose to US$ 784.02 per tonne last week, up US$ 91.90 in a month and US$ 0.40 in a week. As a result, the net cost of softwood increased by US$ 2.80 to US$ 979.53 per ton. The monthly appreciation was US$ 57.90.

In the Chinese resale market, eucalyptus pulp retreated US$ 6.20 to US$ 800.79 per tonne, according to BTG Pactual. Parallel to resale prices having matched import prices, the 16-week strike led by UPM workers in Finland ended on Friday, April 22. According to Reuters, a national mediator successfully proposed an agreement between the different UPM units and the union. Before the deal, around 2,000 workers who had paralyzed activities since January had agreed to extend the strike until May 14.

Source: Valor Econômico

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