Pulp Cycle Possibly Topping Out

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In regard to market pulp, Wilde asks if the pulp cycle might be topping out. Market pulp producers announced price hikes for May, he notes, adding that "this could be 'it' for the cycle." Wilde points out that "Chinese resale prices are falling. Moreover, European buyers are in an untenable position, with U.S. dollar prices rising and the Euro falling."

In North America, market conditions are still tight, driven by strong demand, reduced pulp supply from the earthquake in Chile, and spring maintenance downtime. Softwood prices are set to increase by $40/metric ton and hardwood by $50/metric ton in May. This will take N.A. NBSK to $1,000/metric ton, an all-time peak in nominal terms. Fluff prices are set to rise $20-40/metric ton in both the U.S. and Europe, pushing prices to over $1,000/metric ton.