Wood pulp prices slipped back to May levels in July, evolving the mild inflation of June, according to importers reports. According to the market insiders observation the reduced supply from pulp mill shutdowns and export growth could raise prices in August and September even if demand from paper mills stays at the same level.
Export department of Ukrainian Biofuel Portal confirms there are partially reduced supplies and certain other grades at a time when demand from China for North American market pulp continues to grow.
It is noteworthy that the national sales prices for delivered pulp this month averaged $642/metric ton, down from $648 in June, even though the pulp product's list price has grown in recent weeks by $40 to $700/metric ton. Transaction prices were about $525 this month, about $100 a metric ton below the list price.
Chinese demand has increased in the western markets as demand in North America and Europe is lowered. Some manufacturers agree there are some positive tendencies of new demand in the U.S., but buyers surveyed remain cautious about expanding their sourcing of pulp and paper products until next quarter and are reluctant to commit to higher spot prices.
While global economies remain in recession and pulp prices were generally weak, we observe a stable trendency for this period as record restocking by Chinese buyers and production downtime throughout the industry helped reduce global pulp inventories from peak levels earlier in the year. More over, producers have announced further price growth of about $70 per ADMT for July and August. Offsetting this upward movement however has been the weakening of the U.S. dollar which decreased by about 5.4% and 7.8% versus the Euro and Canadian dollar, respectively, during the quarter.
The experts say, pulp revenues for the three months ended June 30, 2009 decreased by approximately 13.5% to EUR 147.5 million from EUR 170.6 million in the comparative period of 2008, primarily due to lower prices resulting from continued weak pulp markets. Revenues from the sale of excess energy have grown by approximately 86.9% in the second quarter to EUR 11.4 million from EUR 6.1 million in the same quarter last year as our German mills continue to benefit from the higher biomass energy tariffs implemented at the beginning of the year.
Summing up the situation, fiber costs decreased by approximately 16.0% in the second quarter of 2009 from the same period in 2008. Fiber costs at German mills lower due to continuing weak demand from the European board industry. As we move into the second half of the year, the producers expect that fiber prices will level off with some upward pressure in pricing for the German mills as a result of extensive harvesting curtailments on fiber supply.
Contact Information
Ukrainian Biofuel Portal
Sergei Kozlov
http://pellets-
