Key message: European UWF demand holds up better than the US. Navigator cautiously optimistic about UWF demand heading into Q3 but do expect some further pricing pressure. Pulp prices appear to have bottomed, in their view expecting a recovery from Q4.
Key message: EPS in line but gearing higher than expected. We were overly optimistic on Europe and North American margins, and too bearish on DWP volumes in SA.
Key message: Liquidity likely to be favoured over profitability in the ST. Net debt/EBITDA should be below 4.5x by June 2021, however growth options will be limited.
Key message: Paper volumes down 34%, with a recovery still uncertain. Europe box prices under pressure and similar read-through from DS Smith results with box volumes down (-12% y/y and -6% q/q).
Key message from our call with Grasim: ST textile demand recovery remains highly uncertain. Current VSF prices means producers’ margins remain in the red. We maintain that their current DWP requirements could be down as much as 73%.
Key message: Europe expected, US clever move to reduce overheads and effectively scale back CFS capacity.
Key message: Negative ST read-through for Paper Packaging Peers. Despite strong e-commerce and FMCG demand, industrial exposure pushes box volumes into the red. However, likely that COVID has accelerated MT structural demand for corrugated.
Key message: VSF expansion postponed and VSF demand pull maybe by Oct-Dec. We estimate that their current DWP requirements could be down as much as 73%.
Key message: H&M update highlights textile demand pressure continues, albeit the worst appears to be over. Tissue demand could increase pulp demand by > 1.5mt in 2020. OCC prices could now be reversing recent gains as collection rates recover.
Key message: Up to 15% UWF downtime extended till end of June. 2020 UWF demand could drop by 15% y/y.