On January 18, the company published an article signed by Fabiana Batista, pointing out Suzano, Brazil, the world’s largest wood pulp producer SA predicts that with the rise in China’s market demand and the decline in pulp prices caused by COVID-19, leading to high cost production companies have to cut production, the global pulp supply is becoming more intense, which will help Suzano low-cost manufacturers, companies have begun to gradually raise prices.
Carlos Anibal de Almeida Jr., Suzano’s pulp business director, said in an interview: “the market fundamentals are better than previously thought, and customers also recognize the reasons for the price increase after the fundamentals improve.”
Suzano has raised its price for several months in a row. The most recent price increase was aimed at the Chinese market. The price of hardwood pulp in February was 580 US dollars per ton. Citing analysts’ forecasts, Almeida said that the price of Asian market has been falling from $770 / T in mid-2018 to $440 / T in August 2020, and may rise to $640 / T in the next quarter.
Prices are also rising in Europe, where demand will decline the most in 2020. In January 2021, Suzano raised the European price from an average of $680 per ton in 2020 to $750 per ton. Although the company is still considering whether to raise prices in Europe again, Almeida said analysts predict that the price in the European market will reach $850 per ton this year.
Almeida said the tight market led to an increase in the monthly purchase volume of buyers, which exceeded the amount stipulated in the contract, in order to reduce the impact of the increase in pulp price. He declined to comment on Suzano’s clients.
JPMorgan Chase & Co. recently said that some new orders have been cancelled due to insufficient inventory. Almeida said the range of increases in monthly purchases requested by Suzano customers is limited. “I can only say that Suzano is fulfilling all the contracts,” he said The company plans to increase production capacity this year, but he declined to say whether the plans will actually be implemented.
Almeida said that due to long-term low prices, rising logistics costs and weak US dollar, the profit margins of North American producers whose production costs are higher than Brazil have been in a tight or negative state. This will lead to the closure of some factories, the reduction of maintenance expenses of some businesses, and the unplanned reduction of pulp output.
Post time: Feb-03-2021