Chinese traders comes under pressure as softwood pulp prices drop ,
 paperloop.com
SINGAPORE, Aug. 7, 2001 (paperloop.com) - Chinese pulp traders who have stockpiled northern bleached softwood kraft (NBSK) and radiata pine pulp are facing pressure following price slides for these grades. In early August, a major Latin American supplier slashed its radiata pine list price for Chinese buyers by $40/tonne. The move stunned the well-stocked traders, who may have to sell off their volumes at prices lower than they paid for them. 
But in the hardwood sector, certain suppliers and traders are expecting prices to bounce back and creep up by $10-20/tonne in September, although some say the chances of this happening are low.
One Canadian supplier, who pointed toward a rash of pulp downtime taken by his fellow countrymen, reported that softwood prices have hit rock bottom. "All of this downtime is related to low prices that they cannot compete with," he said. He indicated that softwood pricing has begun to stabilize, but does not foresee any price improvements before the end of September.
The hardwood pulp market's immediate future seems brighter. Suppliers reported that Korean buyers have taken large volumes of Brazilian eucalyptus in June and July to build up inventories at low prices. But Korea's overall buying activity reached just 70 percent of its normal level in these two months. The country's weak paper and board market and sagging exports drove Korea's major paper producers to take five days of downtime in July.
In China, Brazilian eucalyptus which is competitively priced continues to have the edge over Indonesian mixed tropical hardwood pulp. Many paper mills have switched to Brazilian eucalyptus from Indonesian hardwood as the price differential between the two grades has narrowed to around $10/tonne from the traditional gap of $60/tonne. 
Another hardwood grade which saw demand pick up was bleached chemi-thermomechanical pulp (BCTMP). Traders reported that consumption of the grade has been growing fast in China, although prices remained unchanged from mid-July.
Softwood sees price slides
NBSK prices have dropped $10/tonne for regular Asian buyers. Spot prices in China and Korea are also down $10/tonne. Russian bleached softwood pulp prices in China stayed flat with consumption steady. Radiata pine prices have slipped $20/tonne for regular buyers and $10-20/tonne in China and Korea for spot business. Southern pine prices are unchanged in China, Japan and Korea, but trading is minimal. Unbleached softwood kraft pulp prices are steady throughout Asia. 
Hardwood prices stabilize
Brazilian eucalyptus prices remain unchanged for regular buyers. But spot prices in China and Korea have edged up slightly. Indonesian mixed tropical hardwood prices also inched up by $10/tonne at the bottom of the price range across Asia, but trading has been declining. Northern mixed hardwood prices remain unchanged in Japan and Korea, while southern mixed hardwood prices are stable across Asia. BCTMP prices are also flat for regular buyers and for spot business in China and Korea.
teresa.aguilera-peon@enron.com, david.allan@enron.com, 