Revised: Russia's Ilim keeping June prices flat in China, with NBSK at US$680/tonne CFR (net), US$650/tonne DAF (net) but transactions US$20/tonne lower; hardwood price at $670/tonne CFR (net), US$640/tonne DAF (net)

Diane Keaton

LOS ANGELES , May 23, 2013 (Industry Intelligence Inc.) – Industry Intel Editor’s Note: This report has been revised to indicate that the June NBSK prices are US$680/tonne CFR (net) and US$650/tonne DAF (net). Sources say the US$20/tonne rebate that was in effect in May will not be in effect in June.

Ilim Group in Russia has told customers in China that it will keep its June pulp prices unchanged, according to buyer information.

Ilim’s China announcement for northern bleached softwood kraft (NBSK) is US$680/tonne CFR (net) and $650/tonne DAF (net). As has been reported previously, these were Ilim’s prices for May, as well, but the company also provided $20/tonne rebates, bringing the effective May prices to $660/tonne CFR (net) and $630/tonne DAF (net).

For bleached hardwood kraft pulp (BHK), Ilim’s prices are $670/tonne CFR (net) and $640/tonne DAF (net). Sources have not reported a rebate for Ilim’s hardwood pulp prices.

Ilim’s June announcement came a few days after Celulosa Arauco y Constitución SA’s (Arauco) June announcement for China. On May 20, the Chilean company said it is raising its June price of bleached radiata kraft pulp (BRKP) by $10/tonne, to $700/tonne (net), while keeping unchanged its prices for unbleached kraft pulp (UKP), at $620/tonne (net) and bleached eucalyptus kraft pulp (BEKP), at $750/tonne (list).

Production, capacity. On Feb. 11, Ilim said in a press release that in 2012, its mills in Siberia and in northwest Russia manufactured more than 2.580 million tonnes of pulp and paper products, including 1.639 million tonnes of market pulp, up 2% year-over-year.

Today Ilim Group said its total production in Russia in the first quarter of 2013 was flat year-over-year at 633,000 tonnes, with market pulp output unchanged at 397,000 tonnes, market containerboard output up 4% to 179,000 tonnes, and paper output down 2% to 58,000 tonnes.

On March 4, Ilim announced that its new 150,000 tonnes/year office paper machine at Koryazhma, Russia, facility had produced its first paper, part of $270M investment project at the site. In its March 12 comments, FOEX Indexes Ltd. noted that the integration of Koryazhma’s pulp with the new paper machine would mean less pulp for the market.

On April 25, Ilim announced that it had started up its 720,000 tonnes/year NBSK pulp line in Bratsk. Recently sources have said the mill’s old 220,000 tonnes/year line was not shut down earlier this year, as had been reported, but that it was shut down this month. The Bratsk mill also has a capacity of 270,000 tonnes/year of BHKP and 285,000 tonnes/year of unbleached kraft pulp (UKP), according to an industry source.

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