Fluff Market Price Trends Market Intelligence

*This report was last updated in Q4 2018. Please click on request customization if you are looking for an updated version of this report

Report Coverage

  • Impact of US-China Trade War on Fluff Pulp
  • Mergers and Acquisitions
  • Fluff Pulp-Supply Crunch Risk in the Coming Years

Table of contents

  1. Executive Summary
  1. Fluff Market Price Trends - Market Overview And Outlook
  1. Price Trend and Forecast-Fluff Pulp-US and Europe
  1. Fluff Market Price Trends -Impact Of Us-China Trade War On Fluff Pulp
  1. Fluff Market Price Trends Key Industry Events
  1. Fluff Pulp-supply Crunch Risk In The Coming Years?

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Global Market Outlook on Fluff Market Price Trends

China let prices slip for the first time in several months

  • Hurricane Florence in Sep-18 resulted in an estimated 35,000 tons of lost fluff production at four mills, representing 19 percent of global capacity. The tonnage figure, which included three International Paper mills and one at Domtar, excludes the more recent Hurricane Michael that swept through the US Southeast in Oct-18
  • Fluff pulp prices to China flat lined in Sep-18 at the back of firm market fundamentals
  • Price of fluff pulp in Europe also went up USD 25/MT in Sep-18 to USD 134/MT at the back of firm demand levels

Fluff Pulp-Market Outlook

Short Term

Price hike announcements for Oct and Nov-18 out

  • Resolute announced an Oct-1'18 list price of USD 1,480/MT on fluff pulp, which is an increase of USD 30/MT vs. the firm's last announced price
  • In North American and European fluff pulp markets, Domtar announced a USD 20/MT increase in Nov'18, that would bring its official list price to USD 1,500/MT, backed by unexpected production outages in British Columbia, a major boiler rebuild at Canfor Pulp, a Fortis BC gas pipeline explosion that curbed natural gas shipments, and in the US Southeast due to hurricane

Medium Term

Medium term to experience firm demand levels

  • Start of 2019 is expected to see firm pricing levels, backed by good demand levels. Tightness in supply is expected to prevail giving raise to price hikes yet again
  • Fluff pulp list prices have hit historic highs, and demand should keep growing, but producers are not adding capacity. This is expected to keep the supply tight, giving way to price hikes in both Europe and North America

Long Term

Market expected to look up in the long term, backed by a possible supply crunch

  • The fluff pulp market is expected to witness more hikes during the first quarter of the next year. Demand levels are expected to be high, which will let hikes go through without much resistance from the buyers' end

Impact of US- China Trade War on Fluff Pulp 

Impact on fluff pulp

  • Wooden products: China's list of products includes US wood pulp, hardwood lumber, and a variety of other wood products that would impact US market pulp and wood products producers
  • Pulp: The Chinese tariffs would target all grades of US market pulp, which would most heavily impact producers of southern bleached softwood kraft (SBSK) and fluff pulp
  • Fluff pulp seems to be the most impacted, as 1.4 MM tons/year will be targeted; however, the market notices that there simply is not enough fluff production outside the US to feed the Chinese market

How did the trade war begin?

  • On Jul-11'18, the US government issued measures to impose tariffs on imports of about USD 200 billion of goods imported in the US from China.
  • On Aug-2'18, the US announced that it would increase the tariff rate imposed on the above-mentioned USD 200 billion worth of goods from 10 percent to 25 percent. This has lead to an escalation of trade friction between China and the United States
  • In return, the State Council Customs Tariff Commission of China decided to impose tariffs on 5,207 tax items imported from the US, which is equal to an import trade volume of approximately USD 60 billion. The Chinese government said it would impose duties of 25, 20, 10 and 5 percent to items belonging to various annexes

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