Analyst roundup: Bradesco says sanctions on Russian wood leaves 30% of Finnish pulp production at risk, in need of alternative source; Santander expects limited downside risk for pulp prices despite slowing Chinese demand due to COVID-19 restrictions

Sample article from our Logistic & Supply Chain

LOS ANGELES , May 12, 2022 () –

Disruptions in Canada, Finland, Russia and Spain along with continued logistics hurdles are compounding supply chain disruptions already caused by maintenance delays and stoppages at firms like Suzano and Klabin (Santander, Apr. 8 and Morgan Stanley, Apr. 13). Accordingly, limited downside risk is expected for pulp prices despite the rising concerns of a slowdown in Chinese demand due to renewed COVID-19 restrictions (Santander, Apr. 18). On the contrary, average hardwood pulp prices in China saw an increase of 13% quarter-over-quarter, which is equivalent to US$73/t according to FOEX (Santander, Apr. 18). It is also worth mentioning that the conflict between Ukraine and Russia continues to put downward pressure on the global supply of pulp (Bradesco BBI, May 5). Sanctions on Russian wood leaves 30%, or approximately 1.2 to 1.5mt of Finnish pulp production at risk and in need of an alternative source of supply, while Russian producers that are struggling to secure bleaching chemicals are running at 50% of capacity, and even shutting down temporarily (Bradesco BBI, May 5). 

 

Primary sources:

  • LatAm Pulp & Paper Monitor – Pulp Prices Above US$800/t in China? Santander, April 8, 2022 
  • LatAm Metals & Mining, Pulp & Paper – 1Q22 Previews: Results to Remain Solid, Despite Ongoing Cost Pressure. Santander, April 18, 2022 
  • Flash Note: Suzano - Positive messages: pulp market remains tights, costs have already peaked. Bradesco BBI, May 5, 2022 
  • LatAm Pulp & Paper – 1Q22 Preview. Morgan Stanley, April 13, 2022 

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Dan Rivard
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