Pulp Trend Forecast 2025: New Capacity Drags Down Prices, Expect Pulp Prices to Recover in H2
Global eucalyptus pulp prices are expected to start 2025 at a low level, around $545 per tonne in China, according to analysts and market sources. A rebound is expected to start in the second half of 2025, with supply and demand expected to reach some balance in favour of inventory replenishment. Based on historical data from Fastmarkets RISI, broadleaf bleached wood pulp (BHKP) prices in the Chinese market stabilise in 2024 after rising by almost 26% in 2023, averaging almost 9% compared to the same period a year earlier. Crucially, price behaviour throughout 2024 is not linear. After rising by almost 16% in the first half of the year (peaking at $745 per tonne in China in June), prices have been declining since then. This price correction has been driven mainly by the entry of new capacity into the market.In July 2024, Suzano started operating the Cerrado project in Ribas do Rio Pardo, which will add 2.55 million tonnes of eucalyptus pulp per year to the market. The mill is expected to produce 900,000 tonnes in 2024 and sell 700,000 tonnes. In China, Lian Sheng Pulp & Paper, a relatively new mill in the industry, launched a new production line, which will bring its combined pulp and paper capacity to 3.9 million tonnes per annum at one of its manufacturing sites in Fujian province. According to Fastmarkets' weekly survey, the net price of broadleaf bleached wood pulp (BHKP) in China is currently stable at $545 per tonne. In Europe, prices experienced a more substantial correction in mid-December, stabilising at US$1,000. Rafael Barisauskas, Latin America economist at Fastmarkets RISI, says: ‘There is still room for further small declines in international pulp prices in US dollar terms in the first half of 2025, especially in the first quarter.’ Fastmarkets expects Asian broadleaf bleached wood pulp prices to fall by a further 6.7 per cent in the first three months of 2025, and expects them to remain stable in the second quarter. Prices are expected to rise again from the second half of the year. Barisauskas added that prices will remain stable throughout the first quarter, followed by a recovery shortly thereafter, depending on international demand. The potential change in demand can be explained by the current low level of buyers' pulp stocks. If, for some reason, they enter the market looking for additional production - which means if demand improves beyond what is expected over the same period - there is scope for pulp prices to recover more quickly,’ the economist said. ’ More significant stock replenishment action is expected to occur after the Lunar New Year, in February, Itaú BBA said. ‘This could trigger an inflection point in the pulp [downward] cycle,’ the analysts wrote in a report.’ The market is also keeping a close eye on the potential impact on pulp demand from China's surplus wood due to the crisis in the property sector. China is the world's largest buyer of raw materials, importing an average of 20 million tonnes a year. L...
- Jan 08, 2025