Porters in Finland, port operators, and workers in the trucking, shipping and oil industries have all been on strike since Wednesday (February 15), and the Union Finnish transport has published new strike warnings from March 1.

Major suppliers such as Metsa Group and UPM have warned of possible delays in shipping due to strikes in Finland to their customers in China and other Asian countries.

The domestic resale of BSK and its futures contract on the Shanghai Stock Exchange reacted immediately after China learned of the strikes early on Wednesday (Feb 15), with futures contracts for BSK being the most popular contract type right now with a peak of 6,744 yuan (NDT)/ton in the morning. However, worries about a shortage of BSK supply were outweighed by concerns about a cut in demand for wood pulp in the Chinese market, leading to its price in the futures contract plummeting. The closing contract for May was stable at 6,620 yuan/ton on Thursday (July 16), down 144 yuan/ton from the previous week. That level is equivalent to 840 USD / ton after deducting 1,135 VAT and 120 yuan / ton on transportation fees.
Last week, with many Canadian producers joining the race to raise NBSK prices from $20-30/ton, Canadian NBSK prices increased by $20/ton from last week's prices to $910-930/ton. meanwhile, Nordic NBSK price has been stable for the past two weeks at $880-900/ton. 

As a result, the average price of NBSK increased by 5 USD/ton to 905 USD/ton. 

In South America, the area of ​​forest in Chile devastated by summer fires continues to increase, but Arauco and CMPC, Chile's two largest suppliers of radiata pine to China, have maintained their business. Their wood pulp mill capacity is stable, according to PPI Latin America.

The contracts show that the wildfires have clearly not affected wood pulp output at the wood pulp mills of these two Chilean manufacturers, but the supply chain is still affected, as shown in Fig. the decrease in the price of radiata pine.

But the price of radiata pine up to now has been flat at 870-910 USD/ton.

Ilim Group uses prices in RMB: Another bulk BSK seller, Ilim corporation, has announced its wood pulp prices in RMB for the first time, after changing the payment method for Russian products last month from USD to RMB due to sanctions against Russia for the war with Ukraine.

Ilim has set the list price of BSK Russia at 6300 yuan/ton (CIF), the main ports in China and 6020 yuan/ton via trucking. All prices do not include VAT and shipping costs.

Both sellers and buyers pointed out that when compared to other BSK imports from elsewhere in USD, a fixed USD-CNY exchange rate of 7:1 would apply.

That formula gives the list price of Ilim's BSK at $900 a tonne, stable from the previous month, according to the Russian supplier.

The producer has priced their BHK at RMB 5130/ton (CIF) and RMB 4930/ton via road.

However, most of Ilim's wood pulp products have been sold at a discount of up to RMB 350/ton or US$50/ton to some Chinese trading parties.

Finally, BSK Russia was revalued at $850-900/ton after the price adjustment, compared with $830-860/ton two weeks earlier.

Pressure on BHK Price: Contracts have shown that the price of BSK will be stable or have a slight increase in the future, but for BHK it is a completely different story.

BHK made in China saw a sharp drop in price this week.

A large supplier reported that the volume of this item offered for sale at RMB 5800-5850/ton, inclusive of VAT, has decreased in proportion to the decrease in the amount of imported BHK. The offers could be equivalent to 750 USD/ton for imported BHK. Buyers say the cuts are more visible in transactions, with this grade having an average price of 5750 yuan/t, or about $725/t, excluding VAT and logistics costs.

The China-made BHK 6220/ton price announced by PPI Asia this week has been assessed prior to the reduction and will be re-evaluated afterwards.

Sources indicate that this decline represents fundamental demand weakness in the Chinese market.

A major trading side has been concerned that China's economy remains in a sluggish state, showing no signs of recovering as expected after the country reopens.

“Workers lost their jobs and sources of income after companies closed during the country's Covid-19 lockdown, leading to a drop in consumer spending. Under such circumstances, how can the price of paper and cardboard increase!", a trader said.

On top of that, consumers have finally expected BHK import prices to fall further as new large capacity producers are about to be put into operation in South America.

However, manufacturers remain optimistic, pointing out that the above events have led to a 200 yuan/ton price increase for the uncoated tissue and fine paper segments.

However, a Brazilian supplier admitted that due to the large number of paper manufacturers using BHKP in China, this is still the main consumer despite reluctance to buy, so BHKP is still under pressure to reduce prices.

BHK South America is priced from 730 - 760 USD/ton, down 10 USD/ton at the lowest level of the price range.