Goldman Sachs Pulp and Paper: Strong Chinese Buying; Focus on Paper and Wood Chip Prices
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Goldman Sachs' channel checks show Chinese hardwood pulp buying remains robust at US$550-560/t, supporting resale prices and imports, with Suzano and APRIL announcing US$20/t increases for September orders. Yet the bank views the bear cycle as merely paused and momentum fragile: paper prices keep falling, Sun Paper's 600kt/yr hardwood line has started up, two more projects should start by year-end, OKI II is near completion, and wood chip prices recorded their first correction since mid-2025 (-US$9/t). China FOEX hardwood import prices eased US$1/t to US$564/t while softwood firmed US$4/t to US$639/t, with futures rebounding on Domtar's 380kt/yr Canadian outage even as high inventories and weak demand cap gains. Global June shipments reached 4.7mnt (+6% MoM, -4% YoY), with seller inventories down three days to 42; China July pulp imports fell 13% MoM to 1.8mnt. Fluff pulp dropped US$33/t—its first slowdown since February 2026—while dissolving pulp held firm with the DWP-BHKP spread near US$300/t. Brazil's July corrugated box shipments rose 7% MoM. Some stabilization or price improvement may emerge in 4Q. Goldman raises Klabin's 2026-28E EBITDA by 4%/2%/1% and lifts its Neutral-rated target from R$19.0 to R$20.0 per share.