Softwood pulp prices stabilize in Asia, some hardwood producers

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SINGAPORE, Aug. 20, 2001 (paperloop.com) - Widespread downtime taken by Norscan softwood pulp producers has begun to affect the Asian pulp market. Prices have stabilized for the first time since September last year.
Low-priced radiata pine pulp from Latin America continues to hold down prices for northern bleached softwood kraft pulp (NBSK). "We believe that the current low prices for the grade will stay until well-stocked Chinese traders deplete inventories accumulated since April," one major buyer said.
Some Indonesian and Thai pulp producers hope to introduce a $10-20/tonne price increase for their mixed tropical hardwood and eucalyptus grades in September, followed by a further $40-60/tonne rise in the fourth quarter. But buyers and some other Indonesian pulp producers are skeptical about the increase's likelihood of success as there are ample supplies of Brazilian eucalyptus selling at competitive prices across Asia.
On top of that, some Indonesian pulp producers are burdened with debt and face wood supply shortages resulting from slower than anticipated progress in the planting of concession areas, illegal logging and other forestry issues. Trading volumes of Indonesian mixed tropical hardwood are in fact diminishing.
Indonesian producers are currently promoting plantation-based acacia pulp, a move welcomed by environmental groups. But distributors and traders in China have received complaints from customers about the grade, in particular, from board producers. "We seldom hear complaints in other Asian markets. The Chinese customers need some time to get accustomed to the grade," one Indonesian producer explained.