Aug.30.2011 by FOEX

BHK pulp China – Shipments of market pulp to China were very weak in July 2010. Therefore, the July 2011 deliveries to the Chinese market were, according to PPPC, up by 30% but still clearly down from June 2011. Chinese import statistics show the weakness as well. The intake of BHKP in July was 39% down from July 2010 and the first month in a long time when imports from Brazil fell below 100 000 tons. News from the market suggest that pulp started moving better in August and while the prices for imported prime BEKP were still falling, the lowest priced spot offers were less numerous. BCTMP prices were actually on a rise.   The PIX China BHKP index continued to retreat, falling this time by 5.23 USD/ton, or by 0.76%, and closing at 680.63 USD/ton. Yuan strengthened last week by 0.1%, against the USD. The conversion of the USD ＆#118alue into Yuan resulted in a drop of 39.44 RMB, or by 0.9%, to 4347.30 RMB/ton.

NBSK pulp China – In August, activity appears to have been picking up also in BSKP. Import statistics for July showed BSKP intake near the monthly average over 2011 whilst in BHKP, July volumes were less than 70% of the average monthly deliveries. Compared to the weak performance seen in July 2010, BSKP intake in July was up by almost 50%. Year-to-date, BSKP imports to China are actually up by more than 50%. Price decline appears to have stopped, at least for the time being.  The PIX China NBSK index moved marginally back up for the second week in a row, rising by 35 cents, or by 0.04%, and closing at 820.24 USD/ton. Yuan strengthened by 0.1% against the USD last week. The conversion of the USD ＆#118alue into Yuan meant thus a decrease of 4.98 RMB, or 0.1%, to 5239.01 RMB/ton.

BHK pulp Europe – European consumption of market pulp, reported by UTIPULP, was down by 2.7%, compared to July 2010, for market pulp total and 1.5% down for BHKP. Most of the decline in shipments from the producing countries seen in July was registered in BHKP. Producers’ hardwood kraft inventories jumped by seven days without taking into account the seasonal adjustment factor and by four days after the seasonal adjustment. The slow intake by China and the weakness of the woodfree printing and writing sector both played a role in the BHKP market softening. Summer holidays had some impact as well, mainly in Europe. The 0.1% strengthening of the EUR against the USD lowered the index ＆#118alue slightly more in euro-terms. The PIX BHKP index-＆#118alue in EUR fell by 2.71 euro, or by 0.48%, and closed at 567.23 EUR/ton. The PIX BHKP index ＆#118alue in USD lost 2.94 dollars, or 0.36%, and closed at 816.92 USD/ton.

NBSK pulp Europe – Producers’ stocks of market pulp went up in July. The rise was expected but with an increase of 5 days without seasonal adjustment, maybe more than expected. Shipments were down by more than 400 000 tons from June 2011 and also down, by 2.5%, compared to July 2010. Shipment-to-capacity ratio fell to only 82%. In BSKP, shipments fell proportionally less than in hardwood and were only marginally lower than in July 2010. Softwood kraft inventories moved up by four days without seasonal adjustment and by two days seasonally adjusted, according to PPPC. As the stocks of pulp rose also in the European ports as well as at consuming mills, downward pressures on prices increased. The USD weakened by 0.1% against EUR from the previous week. Our PIX NBSK index fell by 6.32 dollars, or by 0.64%, and closed at 986.06 USD/ton. The NBSK EUR index fell by 5.20 EUR, or by 0.75%, to 684.67 EUR/ton.

Paper Industry – The tapering off of the economic growth in the industrialized world is already visible also in the demand and inventory movements of paper and paperboard products. July data from CEPIPRINT and CEPIFINE is a good example of this. Combining the numbers of the whole printing and writing paper sector shows the estimated European demand down by 5.5% in July and by 3.3% cumulatively over January-July. Exports outside regions were down as well in July, by over 6%, while still up 2.5% cumulatively. Combining the regional sales and export activity, total shipments were down nearly 5% in July which pulled the cumulative deliveries already one per cent below the rate seen last year. Shipments were soft in July also in North America. Declines in shipments have varied a lot between the months and the grades but for the month of July the drop averaged almost 8% in printing and writing grades and inventories were on a clear rise. In packaging grades, the situation has been better on both sides of the Atlantic Ocean. For containerboards in the US market, July was even slightly better than expected. Still, markets are quite competitive, inventories are on a higher level and pricing initiatives are either forgotten or at least quite challenging to push through.