Limited stocks and increased demand from China is fueling pulp prices hike. Fearful of shrinking
supply Chinese buyers are intensely snapping up pulp ,creating another round of price increase in pulp. February shipments of pulp to China see a $30 or more pmt for BSK [bleached softwood kraft] and unbleached BSK going for an increase of $10 or more.
An idea of the high demand in China can be seen in the following comparison. In 2009 consumption of pulp in China was 13.7 million tonnes compared to a 9.5 million tonnes in 2008. That is more than 40% increase!. The weak demand from the struggling economy of N. America and Europe was completely overshadowed by the ferocious appetite of Chinese buyers. Many big mills in China are stocking up in anticipation of many new machines coming online this year.
What are the implications for us paper buyers? Expect more price increases in the near future.
Let us hope our economy move in the same direction
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