Tight supply leaves little scope for pulp buyers to negotiate on prices.
March has been another month with no signs at all of an imminent reversal in fortunes on Europe's pulp market. Demand continues to be outstripping supply. The situation for hardwood and softwood pulp is equally strained, insiders said. If producers get their way, prices will climb again in Europe and move into line with those charged in China.
The first announcements of additional hikes in the second quarter have been on the table since the middle of March. Insiders noted that most pulp buyers are still leading a hand-to-mouth existence so they have no choice but to accept these demands.
Producers unanimously agreed that additional pulp could not be delivered. Shipments of contractual volumes are regularly curtailed. Maintenance stoppages in Scandinavia and South America that were postponed from last year because of the pandemic are playing a key role in this scarcity.
Insiders stated that sourcing process chemicals is an additional problem for paper mills at the moment. Over the next few weeks, it might become so bad that paper machines will have to shut down.
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