paperloop.com
BRUSSELS, Aug. 9, 2001 (paperloop.com) - Northern bleached softwood kraft (NBSK) prices settled at $460/tonne for regular business during the past week as $480/tonne disappeared into the sunset. Speculation about where levels will end up next puts the price at $440-450/tonne by the end of the month. There are reports that some contract business has already been concluded at $450/tonne.
Norscan inventory figures for July are awaited eagerly. One supplier asserted that a reasonable drop in Norscan stocks would be enough to hold the price of NBSK at $460/tonne. Downtime in British Columbia, Canada, has been particularly strong and there are hopes that this will tug down the Norscan inventories. Stocks of pulp at European ports dropped by 44,000 tonnes from June to July, according to Europulp's figures.
FOEX showed a slide in the price of NBSK of over $10/tonne to $458.92/tonne on August 7 from the previous week's $469.23/tonne. Eucalyptus and birch declined from Euro 458.30/tonne to Euro 449.08/tonne during the same period.
Many price agreements for regular business over the past few weeks have covered July and August. While this can be attributed to the mid-year vacation period effect - any price movement would be irrelevant in Italy in August, for example - market makers believe that a genuine flattening out has occurred and that a period of stability can be expected, albeit at rock bottom prices.
Softwood pulp remains available in Europe for spot deals, although the regular price is so close to the spot price that buyers are more likely to be pestered by their regular suppliers than by one-off deal makers. What little Canadian NBSK that is available on the European spot market is priced at around $400/tonne. This is rather more than the Scandinavian equivalent, which has arrived on the market thanks to the over-production which June's Norscan figures revealed. Much of this pulp, which is available at some $20-30/tonne cheaper than Canadian NBSK, has found its way to Asia and the Middle East to compete for government tenders.
The Pulpex August 2001 NBSK contract closed up $10.25 at $407.5/tonne DDU net the week ending August 3. Pulpex is not an exact mirror of the spot market but has proved a useful barometer and this rise suggests that there is at least little further downward pressure on spot prices.
One supplier believes that a period of restocking by buyers can be expected in September, as just-in-time purchasing in the expectation of further price cuts would no longer be necessary. This would in reality be nothing but a shift of inventory from supplier to buyer. Only a rejuvenated paper market can drag market pulp out of its trough and there is no guarantee that buyers will have the liquidity to increase their stocks even if they wish to. One of the more optimistic analysts said, "The fundamentals are not there for a price increase before October."