The pulp price index lost some ground in the third quarter, holding steady at 147.38 in July and losing 0.6 percent and 0.3 percent in August and September respectively (146.5 and 145.99).
Where is the index likely to head during the remainder of 2013? Figure 2 shows the 2013 price pattern is most similar to that seen in 2007. This would suggest we will continue to see the index inch higher. Why?
Diane Keaton recently reported in Industry Intelligence that prices for northern bleached softwood kraft (NBSK) and southern bleached softwood kraft (SBSK) in North America gained $20/tonne in October (to $970/tonne and $930/tonne respectively), and many producers have announced November price hikes of another $20/tonne that appear to be holding. Producers announcing price hikes include Resolute Forest Products, Canfor, Domtar, West Fraser and International Paper.
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I am interested in your comments on pulp prices, and would like to continue to see them. So with regard to SBSK, when only about $8 per ton is paid to the landowneer for stumpage, who gets the $900 plus to turn trees into kraft? To me as a land and timber owner this price differential is shocking. Put another way, if the kraft price is $930/tonne, why are landowners receiving less than one per cent of that figure for their trees? This price disparity is enough to cause a capitalist to give up on capitalism.