FOEX: NBSK price inches up in US, rises in China, Europe in US dollars and in China in yuan and Europe in euros, while BHKP prices gain in Europe in both currencies but fall in China in both currencies; in Europe, OCC, ONP/OMG decline on higher stocks
February 25, 2014
– NBSK pulp Europe – As Europe is a net exporter of paper grades BSKP pulp, the imports from North America play a less important role than what they used to do in the more distant past. Still, the weather-related supply and delivery problems in North America have an impact on the supply/demand balance here as well. In addition, there have been some production disruptions in Europe as well, including the recovery boiler problem at Stora Enso’s Skoghall mill in Sweden and downtime being taken at the Tarascon mill in February. With port stocks unchanged at a fairly low level and down in January y-o-y also at the consumer side, the market balance remains solid, supporting the early year price increase efforts. An increasing part of the announced hike, typically to 930 USD/ton for NBSKP, shows by mid/late February in our benchmark value. Euro was unchanged compared to the USD (exchange rate of Fri Feb 14th against Fri Feb 21st). Our PIX NBSK index showed a gain of 1.47 dollars, or of 0.16%, and closed at 918.02 USD/ton. When converting this dollar-value into euro, the benchmark headed higher by 1.08 euro, or by 0.16%, and the PIX NBSK index in Euro ended at 669.75 EUR/ton.
BHK pulp Europe – The price gap between the NBSKP and BEKP grades has widened to 150 dollars/ton in Europe and exceeded this week 100 dollars in the Chinese market, at least in gross price terms. This differential is wide enough to trigger further attempts to change the furnish more and more towards BHKP, especially as most analysts predict the price differential to remain wide for some time to come. Together with more capacity and demand in the tissue sector, the market BHKP demand is expected to be good in 2014. On the other hand, new supply is very substantial, too. The first lots of Maranhao pulp are reaching customers now and Stora Enso & Arauco’s mill in Uruguay and the new Oji mill in China will bring a lot of new supply to the market as well.. The number of quotes received in euro was not sufficient to calculate a meaningful average. Euro remained, for once, unchanged against the dollar from the previous week (Friday). The PIX BHKP index value in Euro gained 14 euro cents, or 0.02%, and closed at 560.31 EUR/ton. The PIX BHKP index value in dollars moved up by 19 cents, or by 0.02%, and settled at 768.02 USD/ton.
BHK pulp China – The return of the Chinese pulp buyers from their Lunar New Year holidays has not triggered all that much activity in fibre markets. Inventories are adequate and while shipments from Indonesia appear to experience some problems, the new supply from Latin America starts compensating. Another reason for the slowing down of the demand pull is that the over-capacity in tissue paper production in China means that some of the mills are running well below their capacity and some tissue machine orders have been postponed to a later date. Spot volumes of different BHKP grades are readily available which adds to the price pressures. Our PIX China BHKP index lost 7.26 dollars, or 1.10%, and closed at 653.65 USD/ton. Yuan weakened against the USD by 0.4%. The conversion of the USD BHKP price into Yuan resulted in a decrease of 28.17 RMB, or of 0.7%, to 3981.65 RMB/ton.
NBSK pulp China – The supply-chain problems affecting, or risking to affect, the softwood pulp market are keeping the BSKP supply/demand balance tight. The widening price gap threatens to switch some of the demand from BSKP towards BHKP, but, at this point at least, this risk does not seem to have an impact on the pricing. Spot volumes available on the market are limited and the spot prices have been at or in some cases above the net prices of the normal annual contract sales. As a side-note, the UKP market is equally tight, spot volumes are hard to come by, and the price differential between BSKP and UKP has narrowed over the past 12 months. In BSKP, several producers have announced modest price hikes of 10-20 USD/ton in China from March 1. Our PIX China NBSK index value headed higher by 1.43 dollars, or by 0.19%, and closed at 754.63 USD/ton. Yuan weakened against the USD by 0.4%. The conversion of the USD value into Yuan resulted in an increase of 27.01 RMB/ton, or of 0.59%, to 4596.76 RMB/ton.
US NBSK – The winter storms have continued to mess up the logistics systems through most of February. Consequently, delays in obtaining rail-cars continue to be seen. Also, while most pulp mills are now running normally, the losses in production seen earlier in January/early February will have an impact on the availability. The weaknesses in the graphic paper market are likely to show in the demand for market pulp in a month or two. On the other hand, the maintenance downtime period in early /mid Q2 is almost around the corner. This will help to maintain a relatively tight supply/demand balance for some more time to come. But, during Q2, there is a risk of some of the present dissolving pulp supply being converted back into fluff or paper pulp. Our PIX US NBSK pulp price inched up by 18 cents, or by 0.02%, and closed at 1008.24 USD/ton.
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