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Softer prices for market pulp in China and Europe trickled to the North American market this month as rising inventories and supply availability amid summer slowdowns helped to drop prices in mid-August.
Benchmark northern bleached softwood kraft (NBSK) preliminary August effective list prices decreased $20/tonne to $1,770/tonne, according to Fastmarkets’ PPI Pulp & Paper Week surveying. Spot prices for NBSK fell $20/tonne to $880-920/tonne net delivered to the US East.
Southern bleached softwood kraft (SBSK) slipped by $10/tonne to $1,710/tonne in mid-August. US spot prices for SBSK decreased to $860-890/tonne net delivered to the US East, down $10/tonne.
While some sellers described a balanced market for hardwood and softwood pulp, with one seller citing “decent customer demand,” the majority told of an influx of inventory and supplies that brought down prices for buyers. Higher inventories and packed warehouses were partly to blame for the price reductions, contacts said.
“People need to get tons moving,” a contact that reported downward pricing pressure on spot NBSK said on Aug. 16.
Softer contract pricing in August follows a downturn in spot market prices last month, when US NBSK spot prices fell to $900-940/tonne net delivered to the US East and Midwest, down $25/tonne over the course of two biweekly surveys through July 30. The back-to-back decreases shaved $45/tonne from US NBSK’s spot market’s high in two months, with this week’s survey only the third pricing decline in North America in 2024. P&PW reported in July that more mills came out of outages with flush tonnage at the same time that Chinese consumers bought virtually nothing from global suppliers, and prices for end products are low and imported pulp prices are high. China’s demand remained muted, contacts said.
Potential rail and port strikes in Canada churned up fears in mid-August as well, with one seller contact telling P&PW this week that the strikes “could start from Aug. 22 at the earliest.” In anticipation of rail strikes, one buyer contact said they had “stocked up quite a bit on” NBSK. The buyer contact pinned spot NBSK prices at $880/tonne.
“It’s just another headache for buyers,” a seller contact said of the possible rail strikes in Canada.
In US bleached hardwood kraft (BHK) markets, preliminary August effective list prices for US bleached eucalyptus kraft (BEK) decreased by $20/tonne to $1,535/tonne. Reduced prices into China helped to soften prices for US BEK in August. On BEK, a contact said: “People are selling into China at cut-rate prices.”
North American-produced BHK fell by $10/tonne to $1,490/tonne.
Worldwide chemical market pulp producer inventories were unchanged at 43 days-of-supply in June, the Pulp and Paper Products Council (PPPC) reported on Aug. 15. Global shipments totaled 4.699 million tonnes, posting a 4.4% decrease vs June 2023 results.
‘World-20’ inventories at bleached softwood kraft (BSK) market pulp producers held flat at 38 days-of-supply. Bleached hardwood kraft (BHK) producer stocks decreased two days-of-supply to close June at 46 days, the PPPC reported. June’s two-day BHK inventory decrease came after the PPPC revised up May levels to 48 days from the originally reported 47 days.
“With prices cracking hard in China, it will be interesting to see how these figures develop over the coming months,” an industry analyst said after the report.
June’s flat days-of-supply corresponded to a 77,000 tonne decrease to 6.336 million tonnes, according to a P&PW poll of industry analysts. That brought estimated stocks marginally above levels in April. Since June, the sharp price erosion that began in China has now spread globally, suggesting that producer inventories are on an upward trend.
June’s 4.4% global shipment decrease to 4.699 million tonnes slipped from year-ago shipments of 4.918 million tonnes. Overall results were weighed down by a 24% drop in sales to China, a PPPC official said in a note accompanying the report.
Global shipments to China totaled 1.523 million tonnes in June, down 24.2% (rounded to the nearest 1/10th percentage point) vs year-ago results of 2.008 million tonnes, and a 15% increase vs May’s 1.324 million tonnes, according to PPPC data.
Worldwide BSK shipments totaled 1.771 million tonnes in June, down 6.3% vs year-ago shipments of 1.891 million tonnes, and down 3.5% vs May’s 1.836 million tonnes. Global BHK shipments decreased to 2.763 million tonnes in June, dipping 3.5% vs year-ago shipments of 2.865 million tonnes and up 12.5% vs May deliveries of 2.455 million tonnes, the PPPC reported.
The shipment-to-capacity ratio, which some watch as a key indicator of demand, averaged 90% in June. That figure was eight points below the year-ago average of 98%, but up seven points vs May’s 83%.
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