The Black Liquor travesty continues to mock us, rather than slink away and die from embarrassment – as it should. The Dead Tree Blog has posted an important update, IRS Brings Son of Black Liquor Back From the Dead; Ruling May Be Worth Billions to U.S. Pulp Makers . Continue Reading
Category : Black Liquor, Environmental Issues, Politics, Pulp
We covered pulp and pulp prices in last month’s Reel Time. We suggested that (1) pulp prices would rise to at least $1050/tonne, ( probably higher) and the earliest possible peak would be in the fourth quarter. (2) Capacity would come back on line more slowly in Chile than others had expected. Continue Reading
The passage that follows is from our most recent issue of Reel Time (March 1). We were confident that coated and SC-A prices would soon soon begin a sustained recovery – if not initially due to the supply/demand balance, then due to machine closures that would then impact the supply/demand balance. Continue Reading
Category : Black Liquor, Politics, Pulp
Mark Wilde was reported in Forestweb last week as follows.
Legislative moves in U.S. might allow pulp and paper producers to claim US$1.01/gallon cellulosic fuel tax credit.
Forestweb March 17 — Recent legislative efforts said to be underway in the U.S. might allow the pulp and paper industry to claim a cellulosic fuel tax credit for production of black liquor, Deutsche Bank paper and forest products industry analyst Mark Wilde reported in a research note today. This credit would be for black liquor produced and fired between Jan. 1 and the enactment date of the new bill, said Wilde, adding that the date is likely to be in the next several days.
I received the following note this week from a good friend who works for a Canadian pulp company. Continue Reading
Coated Groundwood Price Increase- We have been projecting a second quarter price reversal in coated grades since early last fall. It has been our contention that a market turnaround could occur without additional capacity withdrawals – if producers would maintain a disciplined approach. In other words, producers should continue producing uncoated grades on coated equipment well into the future, rather than switching back to more profitable coated grades as soon as possible. Continue Reading
Higher pulp prices result in higher costs for non-integrated coated and other value-added paper producers. These higher costs do not have a significant impact on paper prices (see Absolute Truth #1), but do raise the pricing floor for paper somewhat, and this limits how far prices can fall in an over-supplied market. Obviously, the paper grades that use the highest percentage of kraft fiber are effected most seriously.
U.S. pulp prices have oscillated wildly over the last few years. After peaking in August, 2008, at $885/tonne, prices plummeted to $640 in just eight months. Now, after another eight months, pricing has nearly reached the 2008 peak again. Prices in December average about $830 and another $30/tonne has been announced for January.
As more supply comes into the market (re-starts primarily), and China eventually reduces its purchases, this strong market will end. However, that will not occur during the next several months, and maybe not even until the second half of the year.
Attached is a very interesting one-page monthly pulp update for November – courtesy of Equity Research Associates. 091223 Pulp Shipments Up Inventories Down