The lower demand for certain products, added to a greater supply in the international market, partly due to the start-up of UPM 2, push the values down.
He pulp price It has been experiencing a sharp drop in international markets for several weeks, registering figures of between 450 and 500 dollars per ton, when at the end of 2022 it had reached peaks of up to 800 dollars. A situation that strongly affects income from exports of Uruguay.
The last eight weeks have not been the best for the pulp market, especially for short fiber, whose prices have plummeted considerably. After the consolidation of the improvement after the impact of the Covid-19 pandemic and the decrease in consumption, this product experiences a new winter in terms of its values.
This fall is fundamentally sustained by a drop in demand for paper and packaging materials, consequence of the fall that is being registered in the international economy. The decrease in Chinese participation for the longer quarantine he experienced he was also responsible; as well as the European Union, with up to 30% less demand for these products.
How did the other pulp products fare?
For long fiber, the fall is being recorded to a lesser extent, supported above all by a drop in production in Canada, for climatic reasons. In this case, the values oscillate between 720 and 780 dollars.
To this we must add that there will be more fiber availability in South America as a consequence of a large-scale project in Chile, in addition to the commissioning of UPM 2, which does not favor a strengthening of the price either. The new pulp mill in the country, on the one hand, means higher revenues due to the higher placements of this product; but, on the other hand, it pushes the values to the band in the face of a greater supply in a context of a parallel fall in demand.
For chips, the situation is similar and we have to see what happens in the coming weeks with demand and prices in China or Europe. It was expected that prices could fall, but the magnitude of this decline in less than two months was surprising in the area.
In the case of freight, as fewer trips are made, there is greater availability of them, which somewhat deflates those costs, which, in any case, remain high.
Source: Ambito
