Top forest products stories this week, February 28 2022

European containerboard prices level out, US pulp prices continue to rise, Malaysia becomes a top OCC exporter

European containerboard prices start to level out as overheated market begins to normalize

Packaging

The European containerboard market began 2022 on a more cautious note compared to 2021. Last year started out at full speed and with all-time price highs reached, forcing sellers and buyers to adopt a crisis management mode throughout the year. At the start of 2022, the market appears more balanced, with some cooling, although demand remains strong. Stocks are also higher than expected, according to market participants.

  • The market has welcomed improved paper availability
  • Producers are unsettled by the possibility of falling prices
  • Sources reckon the market is at a crossroads – time will tell whether we’re on the cusp of a temporary shift or a deeper structural trend

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As US pulp closes up $40-65, Eldorado, Ilim, Resolute add March hikes; Crofton NBSK goes down again

Pulp

Canadian market pulp mills continue to take unexpected downtime and market participants see little short-term relief in ongoing supply constraints, buoying a fresh round of price increases as several producers announced moves in key markets globally. In North America, Alberta-Pacific (Al-Pac), Eldorado, and Resolute Forest Products (Resolute) separately informed customers that they would increase list prices $30-110/tonne depending on grade, industry contacts said.

  • Benchmark northern bleached softwood kraft (NBSK) saw February effective list prices increase to $1,515/tonne, up the full $65/tonne producers broadly announced for Feb 1
  • US southern bleached softwood kraft (SBSK) effective list prices increased to $1,505/tonne, matching the $65 rise
  • US buyers tried to supplement contracts with extra tonnes on the spot market early this month but those prices rocketed up because railroads are backlogged and trucking routes expensive

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Malaysia becomes Top 10 exporter of US old corrugated cardboard

Recovered paper

Recovered paper markets have seen several shifts in the last two years, and where tonnes have been shipped to has been a dramatic change. China’s ban on global recovered paper imports at the start of 2021 did not slow down shipments, and instead, export buying increased year-over-year every month last year, except for in January 2021. Recent trade data from the US government show some countries have hiked up their buying significantly, such as Malaysia, Thailand, and Mexico.

  • Malaysia has made its way into the Top 10 list for recovered paper’s major export destinations for the first time
  • Malaysia purchased 122% or 425,140 tonnes more recovered paper in 2021 vs 2020
  • Sellers and buyers are paying close attention to Malaysia’s import rules and restrictions as it banned mixed paper on Jan. 1, following Vietnam’s ban on mixed paper at year-end 2021

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Case Study

Learn how to monitor packaging prices using cost and price indices and understand the underlying cost drivers, from material cost to labor, energy and more. Examples include cartonboard, liquid container and paper bag.

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