Pulp Industry Perspective
4th Quarter 2012
Pulp Prices Increase in Q4
By Jesse Marzouk
North American pulp
prices rebounded in the
fourth quarter after a significant decline in the third
quarter. NBSK list prices in
the U.S. increased $40 per
tonne from $830 to $870.
Prices for NBHK in the U.S.
also increased, rising $20
per tonne to $735. Furthermore, price hikes of approximately $20 or $30 on softwood
grades have already been announced in the U.S. and Europe
for January 2013.
One area that Hilco does not
typically focus on in its quarterly
forestry perspectives is the dissolving pulp market. The main
reason is its relatively small size
(approximately 10% of the size
of paper grades combined).
Dissolving pulp is used for
two primary purposes; as a fiber
source for rayon (viscose) and
as the base product used to
make cigarette filters (acetate).
The viscose pulp market is
the larger market and is considered more of a “commodity.”
Prices tend to fluctuate significantly, including large fluctuations in 2011 and 2012. Viscose
often competes with cotton linter
pulp and after cotton prices rose
significantly in 2011, viscose
pulp prices more than doubled in
a six month period to near
$2,500 per tonne. As cotton
prices crashed in the second half
of 2011 and into 2012, and producers increased capacity of
viscose pulp, prices cratered to
around $900 per tonne in recent
months. While demand still remains strong for viscose pulp,
the capacity increases have
overwhelmed the market as producers tried to take advantage of higher prices. Prices
may have reached lows recently,
however, and have shown signs
The acetate market has
steadier pricing and has been a
huge winner over the last five
years, where pricing has increased from $1,400 per tonne
to $1,900 per tonne. Acetate
grades are much harder to produce, allowing producers to gain
pricing power as it is difficult to
transition a mill to produce it.
Going into 2013, it appears that
the acetate market will remain
strong with pricing holding high.
Jesse Marzouk is a vice president and forestry products specialist. He has
appraised numerous U.S. and Canadian pulp, paper, and lumber-related companies
involved in manufacturing and distribution. Jesse received his MBA in finance from
Kellogg School of Management at Northwestern University, and has a degree in
finance and accounting from Indiana University.