Market Pulp Caution

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On the surface, market pulp reports look OK, Wilde says, but currents below the surface are increasingly troubling, he adds. Market pulp prices rose $20 - $30/metric ton in June—potentially the last leg in the 13-month price runup. U.S. and Europe appear OK, but Asian markets (especially China and Korea) seem weak. Pending restart of nearly 2 million metric tpy in Canada and China and the return of Chilean mills suggests that prices may be reaching near-term peak.

"In Europe, we find a combination of rising U.S. dollar prices and a falling Euro very troublesome. A number of Deutsche Bank trade sources are pointing to mills increasingly eager to cut 'deals.' Some such reports suggest that prices on 'spot' deals could be falling markedly. We are working to gain a better sense of the degree to which markets may have shifted direction," Wilde notes.