March 2024 pulp price update

After reaching a low point in July 2023, pulp prices have begun to show signs of a timid recovery in recent months. The following chart illustrates the price trend in euros for bleached pulp of conifers and hardwoods over the last 24 months, highlighting a clear trend reversal in the summer of 2023 for both types.

Price of bleached paper pulp in Europe: coniferous and broadleaf

Bleached chemical pulp is by far the most traded type of paper pulp in the world. Unbleached paper pulp is also marketed, but in much smaller volumes. Therefore, bleached chemical pulp represents the best benchmark for analyzing the situation of the paper pulp market. The European Union is a net exporter of bleached conifer paper pulp, while it is a net importer of bleached hardwood paper pulp, with high import flows of pulp from Brazil and Uruguay, produced from eucalyptus wood.

The following chart compares the price of the two types of pulp recorded in Europe with that of the same types of chemical pulp imported from China.

Comparison of pulp prices in the EU and China

The chart clearly shows how the four considered prices have followed the same dynamic, maintaining, however, different price levels. From the point of view of the most recent dynamics, even the prices of Chinese imports have been recording an increasing trend since the summer of 2023. For a more precise analysis of the levels, the table below reports the annual average prices of the considered prices. The table also includes the annual average prices of NBSK pulp. The importance of this price is that it is recorded daily at the NOREXECO exchange[1].

Pulp prices in the world (euro/tonne)

The analysis of these data highlights the following facts:

• Considering both the European and Chinese markets, bleached conifer chemical pulp has a price on average 15% higher than bleached hardwood chemical pulp.
• Conifer pulp in Europe has a price on average 7% lower than the prevailing price in China. This differential is justified by a level of production in Europe exceeding demand, compared to a strongly deficient Chinese market;
• Hardwood pulp in Europe has a price on average 6% higher than the prevailing price in China. This differential is also justified by the different impact that imports and exports have on the European market. In the case of bleached hardwood chemical pulp, the EU indeed records a trade deficit with partner countries;
• The gap between the price of NBSK pulp quoted at NOREXECO and the average price of paper pulp traded on the physical markets of the EU and China has progressively increased over the years, moving from 60% in 2019 to over 100% in the early months of 2024[2].

The last fact seems particularly noteworthy because the increasing distance between the NBSK price and the price of paper pulp on the physical market, while justified by the commodity characteristics of NBSK paper pulp, raises doubts about how much this financial price is still a guide for the price on physical markets.