Revised: Arauco in Chile confirms it has dropped May bleached radiata pulp price in China US$30/tonne, to US$700/tonne (net), and unbleached kraft pulp price US$10/tonne, to US$710/tonne (net), having earlier announced that it would keep May prices flat

LOS ANGELES , April 29, 2014 () – Industry Intelligence Inc. editor’s note: This report has been revised to show that an Arauco official has confirmed the BRKP price decrease and also to report the UKP price decrease for May.

Chile’s Celulosa Arauco y Constitución SA (Arauco) has reduced its May price for China of bleached radiata kraft pulp (BRKP) by US$30/tonne, to $700/tonne (net), and its unbleached kraft pulp (UKP) price by $10/tonne, to $710/tonne (net), an Arauco official has confirmed.

Arauco made the move yesterday.

The official said Arauco has accepted normal BRKP allocations for May at $700/tonne (net) but that not all business is finished, and he said the company has taken UKP orders at the $710/tonne (net) price.

Chinese customers have been pressuring for lower prices in recent months, and this is the second straight month in which Arauco has announced unchanged pricing for BRKP, but has then subsequently reduced the price. Its UKP price was unchanged in April.

On April 16, Arauco had said that it would keep its May prices unchanged, at $730/tonne (net) for BRKP and $720/tonne (net) for unbleached kraft pulp (UKP). At that time, Arauco described its bleached eucalyptus kraft pulp (BEKP) price as “pending.”

Meanwhile, as previously reported, Russia’s Ilim Group in mid-April dropped its northern bleached softwood kraft (NBSK) price to about $670-$680/tonne, down $30-$40/tonne, with the lower price being for higher-volume deals. Today a pulp sales agent source reported hearing that the range is $660-$680/tonne.

As reported on April 22, an Arauco official said the company had fixed almost all of its April softwood pulp volume at its revised April price of $730/tonne, which itself was down from the company’s earlier plan to keep its price unchanged from $750/tonne, “and we did not push for 100% as we did not want to put pressure on the market and our stock level is low.”

Arauco has a total capacity of 3.235 million tonnes/year, including 2.885 million tonnes/year at its mills in Chile. Its Alto Paraná mill in Argentina, which has a capacity of 350,000 tonnes/year, can swing to either fluff pulp or BRKP.

As recently reported, the startup of the 1.3 million tonnes/year Montes Del Plata pulp mill in Punta Pereira, Uruguay, a 50-50 joint venture between Arauco and Finland’s Stora Enso Oyj, has been pushed back again, with the latest timing now expected to be no sooner than late May.

Arauco recently received approval from environmental authorities for its planned $2.1 billion expansion and modernization project at its mill in Arauco in southern Chile. The project would involve the construction of a 1.56 million tonnes/year BEKP line and the closure of the mill’s existing 280,000 tonnes/year BEKP line, as well as the modernization of the mill’s 506,000 tonnes/year BRKP line. 

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