The report is divided into three parts.

First is the comparison between bleached chemical market pulp production and shipments. The supply disruptions during H1 2022 were mainly caused by heavy maintenance in LATAM, UPM strike, mill closures in Canada & USA, etc. Logistical bottlenecks have lengthened the lead times for pulp deliveries like port congestions, lack of railcars, trucks, strikes, etc.

Second is world consumer stocks of paper pulp during 2018-2022. Suppliers’ inability to service their customers efficiently has created significant pent-up demand and obliged consumers to draw down their inventories of pulp. At the same time, macro-economic challenges are growing. Slowing GDP growth, surging inflation and central bank tightening are three main forces shaping the current macroeconomic satiation.

Finally is the comparison between the Economist Industrial Commodity Index and pulp prices. Oliver said that the correction will come, but already the looming capacity surplus looks more digestible than 12 months ago.