UFS Prices Driven by Capacity Cuts, Low inventories, High Pulp Costs

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List prices for various uncoated free sheet grades in North America were up $30-$40/ton (announced = $60/ton) in May, Wilde says, adding that 50-lb offset rolls were up ˜$30/ton to $915-$935/ton and 20-lb repro bonds were up ˜$40/ton to $1,090-$1,135/ton. Producers expect to realize the balance increase in June and July as contract prices are revised and smaller suppliers implement the price increase. This is the second price increase of the year following the $40/ton price increase in both cut-size and roll grades in March. The recent price increase is driven by capacity cuts (Domtar, IP), low inventory levels (-17% y/y), and sharply higher pulp prices, Wilde explains. Most big UFS producers in N.A. are integrated, so rising pulp prices are of little concern.