The outlook for market pulp
！！Oliver Lansdell, Hawkins Wright
2018-05-24 11:07:31
Oliver Lansdell, Hawkins Wright, presented his report of The outlook for market pulp
Oliver's report is divided into two parts. One is the comparison between pulp prices and other commodities. The second is the long-term supply and demand structure and outlook.
First of all, Oliver showed a comparison of EBKP, DWP (CIF China) and the Economist Industrial Commodity Price Index, referring to the re-inflation of most commodity prices in 2017 due to: 1. weaker US dollar (US dollar index -10% ); 2. Supply restrictions; 3. Recovery of global economic growth.
Then Oliver focused on forecasting the demand for commercial pulp. In the 2017-2022 range, the bleached pulp is 5-6 million tons, the dissolving pulp is 23 million tons, and all the pulp is 7.6-9.1 million tons. Its demand forecast is conservative, but there may be a supply gap when demand growth is compared with capacity growth. In addition, the 3.8 million tons of potential production capacity takes 3-7 years.
For the new potential supply, Oliver also answered why he was hesitant to invest and build factories?
1. Capital-intensive, especially new factories are more inclined to mergers and acquisitions.
2. The market is cyclical.
3. The economic recession in Brazil and Russia.
4. Political risks (increased trade tariff threats, unstable government)
5. Environmental Risk > Allow Usability
6. Supply risks make it increasingly difficult to manage sustainable low-cost wood chips.
The threats mainly come from: a competition for planting land, such as Australia; b laws change c climate change, especially drought.
Finally, Oliver Lansdell focused on whether the next round of upswings has already begun? The report sums up the influencing factors such as supply and demand fundamentals and macroeconomic support prices. The threat to global economic growth comes from many sources: climate, networks, geopolitics, and inflation, etc. The site has specifically raised the point that can be recalled: The weakening of the U.S. dollar has caused a great impact.
Oliver's report is divided into two parts. One is the comparison between pulp prices and other commodities. The second is the long-term supply and demand structure and outlook.
First of all, Oliver showed a comparison of EBKP, DWP (CIF China) and the Economist Industrial Commodity Price Index, referring to the re-inflation of most commodity prices in 2017 due to: 1. weaker US dollar (US dollar index -10% ); 2. Supply restrictions; 3. Recovery of global economic growth.
Then Oliver focused on forecasting the demand for commercial pulp. In the 2017-2022 range, the bleached pulp is 5-6 million tons, the dissolving pulp is 23 million tons, and all the pulp is 7.6-9.1 million tons. Its demand forecast is conservative, but there may be a supply gap when demand growth is compared with capacity growth. In addition, the 3.8 million tons of potential production capacity takes 3-7 years.
For the new potential supply, Oliver also answered why he was hesitant to invest and build factories?
1. Capital-intensive, especially new factories are more inclined to mergers and acquisitions.
2. The market is cyclical.
3. The economic recession in Brazil and Russia.
4. Political risks (increased trade tariff threats, unstable government)
5. Environmental Risk > Allow Usability
6. Supply risks make it increasingly difficult to manage sustainable low-cost wood chips.
The threats mainly come from: a competition for planting land, such as Australia; b laws change c climate change, especially drought.
Finally, Oliver Lansdell focused on whether the next round of upswings has already begun? The report sums up the influencing factors such as supply and demand fundamentals and macroeconomic support prices. The threat to global economic growth comes from many sources: climate, networks, geopolitics, and inflation, etc. The site has specifically raised the point that can be recalled: The weakening of the U.S. dollar has caused a great impact.
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