August 2012
Over The Wire Tissue Edition
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Summer Lull, Economic Downturn Pressure Pulp Prices in Europe

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The summer lull by paper producers and the global economic downturn made life difficult for European pulp manufacturers in July, according to a report by EUWID, Germany, which notes that industry experts all agree that further price reductions are going to occur in softwood pulp. Hardwood pulp producers are also going to find it difficult to maintain their existing price level even though the BEK market is still looking robust, they say.

The downhill trend in the European common currency is only adding to the pressure on prices, EUWID continues. The exchange rate has been roller-coasting for a number of weeks now and has been as high as $1.21 at times. Thus, buyers in the euro region are paying more for pulp in spite of falling U.S. prices. Pulp manufacturers say papermakers should be interested in price stability nevertheless. Pulp prices are said to be their only argument to bring plunging paper prices to a halt at the moment.

In spite of more conspicuous reductions in the past few months, EUWID says, prices for softwood pulp are still under more pressure than those for hardwood pulp, and manufacturers do not have much room left to maneuver. Experts do not expect to see any marked improvement in the global economy and thus an upswing in demand on western paper markets until the end of the year at the earliest, EUWID points out, adding that at the moment, only a few have any hopes that the situation could change as early as September. Market players have told EUWID they believe a number of competitors will soon have no choice but to resort to stoppages for market reasons. As always, "no one wants to be the first," EUWID was told.

Eucalyptus pulp manufacturers are hoping for growth at least from numerous newly-opened or planned tissue capacities in China. However, this would not compensate for the slump in demand from paper mills in the West either, an industry observer pointed out, EUWID concludes.



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