Pulp prices respond to vagaries of global demand

Global market pulp prices continue to defy the commodity trends, remaining high in April as inter-sectoral demand balances continue to change.

In the main Chinese market, shown in Figure 1, Bleached Softwood Kraft (BSK) pulp prices rose USD20/t on average to USD610/t, while Bleached Eucalypt Kraft (BEK) pulp prices shifted up around USD15/t to average in the vicinity of USD500/t.

Fig. 1 – China Chemical Pulp Prices by Grade and Spread: Jan ’06 – Apr ‘20 (USD/t)

Source: Hawkins Wright

According to Hawkins Wright, the strength of demand for bleached chemical pulps was fuelled by the pressures on the tissue and hygiene sectors, to the extent that declines in printing and communication paper demand have been absorbed.

Supply of BSK is reportedly constrained and will be throughout May, allowing producers to consolidate price increases in all markets. The prospects for further price increases for BEK pulp are less strong. This is due to the ever-softening global market for printing and communication papers, more than any other factor.

The reality is that the demand spike in global tissue and hygiene markets cannot continue unabated. It will eventually settle, albeit it likely at a higher level than before. Given demand for printing papers will not experience much of a rebound, it can be anticipated that there will be some downwards pressure on pulp prices in coming months. That is a serious challenge for marginal BEK pulp producers, including some of those in China, who are considered to be operating at below the marginal cost of manufacture.

As the Australian and New Zealand experience seems to indicate, the June quarter will be one of global recession and that may also prove to be the case for the September quarter. As previous significant crises have indicated – the GFC is the prime example – we can anticipate that not all of the demand declines will result in a recovery, or at least not much of one.

That is likely to see shuttering of production of significant volumes of uncoated woodfree and coated woodfree paper production in particular. Indeed, that process has already commenced. Whether in two months or two years, the implication for BEK pulp in particular, but bleached chemical pulps overall, is that demand will be lower into the future.

Whether the production that goes offline is integrated or market pulp is uncertain at this point. However, the last decade has seen integrated pulp production decline modestly, while market pulp production has grown.

That may be a pointer to what occurs over the next year and more, as producers rebalance production to the new market conditions, whatever they will be.

In the meantime, the pulp market will be caught in the turmoil, with a very challenging second half of 2020 already locked in, even if the price outcomes are not as clear.

Global Chemical Pulp Prices: Apr ‘20 (USDCif/t)






Change on Prior Month


Change on Prior Month

North America*




Western Europe














Source: Hawkins Wright, Brian McClay & Associates, Pachem and IndustryEdge research

IndustryEdge’s Pulp Market Briefing is published every month in Pulp & Paper Edge, Australia and New Zealand’s leading analysis of the regional and global paper, paper products and fibre supplies industries

Free Stuff

Sign up right now for instant access to market information, samples of our publications, various market and product guides and analysis and view some of our forum presentations. You will also be regularly updated via our blog.

> sign up now


Receive special offers and news.

Contact Us

IndustryEdge Pty Ltd
PO Box 7596
Geelong West, Victoria 3218

Ph +61 (0) 3 5229 2470
Fx +61 (0) 3 5229 0034
Em info@industryedge.com.au