Coy Paper's current News on the pulp and paper Industry continues to report on the tightening of the world pulp supply and that global prices have soared. We firmly predict that North American pulp prices are heading toward 15-year highs. Accordingly, paper and packaging materials will also increase.
Our past releases have included supply disruptions in Chile and Finland, two large producing countries supplying almost 12% of the world's annual pulp demands, coincided with a recovery in demand in China. Pulp is the raw material used to manufacture newsprint, fine paper, magazine paper and cardboard.
The two week strike at the Finnish ports resulted in plant shut downs in Finland and much of Chile's 4Million tons of annual market pulp is out of production due to the earthquake and tsunamis.
The March transaction price for Northern bleached softwood kraft of $890/MT is just under list of $910, past the 2008 cyclical high of $880 and heading toward the $925 transaction peak in the fourth quarter of 1995. Northern bleached hardwood kraft, at $785/MT spot this month, compares with $820 list and still has a way to go to reach the $865 peak in late 1995.
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Pulp increase good for pulp producers, not so good for paper makers. Economy very difficult and too aggressive a pricing policy will be a slippery rope to climb. No question if such a large component such as pulp increases, paper will be forced to increase pricing.
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