Finland's Metsa Fibre sees a chance of raising prices for its Nordic wood pulp this year and says its 1.2 billion euro ($1.35 billion) new pulp plant will supply growing market demand, particularly from China.
Nordic forest companies have cut back paper output for years amid consumers' shift from print products to digital devices. But the future looks brighter for pulp made of northern spruce and pine as that is needed for tissue and packaging board - products seen growing on the back of Chinese demand.
Metsa, a rival to Sweden's Sodra, Canada's Canfor Corp and Mercer International, is set to become the world's largest seller of softwood pulp when its new Finnish plant with annual capacity of 1.3 million tonnes starts in late 2017.
The European market price for benchmark softwood pulp fell about 14 percent last year, but it has stabilised this year at around $810, according to FOEX pulp and paper indexes.
"The rest of the year will be rather flat, there might even be some possibilities to get prices slightly higher towards the end of the year," Metsa Fibre sales executive Ari Harmaala told Reuters by phone.
"Next year will probably be quite stable as well, but it all depends on the market and supply-demand balance."
He noted that some companies like Sodra are expected to ramp up new capacity in the softwood grade next year.
Metsa expects global demand for softwood pulp to grow around 1 percent annually through the coming years on the back of increased demand for tissue and packaging board in China.
"The timing of our new plant looks pretty good," Harmaala said.
In hardwood pulp, made for instance from eucalyptus, companies such as Fibria and Asian Paper & Pulp are starting new plants in South America and Indonesia. The benchmark price for the hardwood grade has fallen 15 percent this year to $662.
Source : reuters.com