Chile's Arauco sees bleached softwood kraft pulp demand in China at US$670/tonne (net), unbleached price similar to bleached; Chinese demand still limited for eucalyptus pulp

LOS ANGELES , November 1, 2011 () – Celulosa Arauco y Constitución SA (Arauco) in Chile has fixed nearly all of its November allocation of bleached radiata kraft pulp (BRKP) for China at US$670/tonne (net), a company official said today.

He said not much bleached eucalyptus kraft pulp (BEKP) business has been done yet and that the company is still checking market levels, which he said so far show a large price range going as low as $550/tonne (net).

Arauco’s unbleached kraft pulp (UKP) price is between $670-$680/tonne (net), similar to that of BRKP. There is usually a gap between the two Arauco grades; in July, for example, it was $80/tonne. The Arauco official noted today that the UKP price decline has been less severe than that of bleached grades.

Arauco typically makes price announcements a week or two before the coming month, but in light of the difficult market and customer reluctance to take volumes, the company has been negotiating November business with customers one by one, the official said.

Nor have producers of northern bleached softwood kraft (NBSK) made November announcements for China.

As reported on Oct. 25, Ilim Group in Russia decreased its November price in China of bleached softwood kraft pulp (BSKP) by US$80 per tonne, to US$710/tonne CFR port (cost and freight), while leaving its bleached hardwood kraft pulp (BHKP) price unchanged, at $650/tonne CFR port.

For October, Arauco had announced $820/tonne (net) for BRKP and $650/tonne (net) BEKP, both unchanged. But market sources have been saying that for October, Chinese customers were demanding that prices of the various grades of BSKP be at or below $700/tonne and of BHKP be at or below $600/tonne.

Arauco, a major supplier to China, has a total market pulp capacity in Chile of 2.865 million tonnes/year. The company also has 350,000 tonnes/year at its Alto Paraná mill in Argentina.

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