Key message: Pulp prices continue to edge up in China and Europe. Graphic paper and Containerboard prices stable. Meanwhile, CWF producers, Sappi and Lecta are targeting price hikes of 7-10% from January to address ongoing cost inflation. Gas futures in Europe are currently trading at €47/MWH.
Key message: Pulp prices continue to rise in China and Europe and London Pulp Week revealed how well pulp supply has been managed in 2023, but uncertainty remains around demand heading into 2024. Graphic paper prices stable to slightly down. After weeks of stable Containerboard prices, kraftliner and testliner soften 1-2%.
Key message: Sappi reported stronger than expected Q4 23A results with EBITDA of $168mn and net debt of $1.085mn (net debt/EBITDA of 1.5x) and maintained a cash dividend of $0.15/share. Q1 24E EBITDA is expected to be lower q-o-q, somewhat impacted by planned shuts (-$40mn).
Dissolving wood pulp segment continues to gain traction, while Packaging & Specialties destocking is taking longer than expected. Graphic Paper is still struggling, with further capacity reductions needed in Europe. Gearing to pick-up in the next 12-24m but covenants (net debt/EBITDA <4x) should not be tested based on our current estimates. We expect Q4 23E EBITDA of $135mn.
Key message: Smurfit Q3 23A trading updated pointed to slight EBITDA margin expansion to 19%, while the cadence of corrugated box volume declines easing further. FY EBITDA guidance implies a weaker Q4, mainly driven by lower corrugated box prices. Smurfit confirmed that the WestRock deal is on track to close in Q2 24E.
Key message: Navigator’s Q3 23A results confirmed that profitability is improving, despite challenging conditions. UWF order books are set to improve in Q4 and 2024 and UWF delivery times are increasing (now at 2021 levels). Navigator believes a more balanced S/D outlook for UWF and higher costs will support further UWF price increases. Pulp prices have been driven by Chinese demand – prudence is needed for pricing in 2024 as new supply ramps up vs. the volatility of the Chinese market.
Key Message: Nordic Paper’s Q3 23A results confirmed that profitability of their Sack Kraft Paper segment is under pressure due to lower selling prices and elevated wood costs.
Key message: Underlying EBITDA softened further in Q3 and Q4 is likely to be lower driven by further weakness in kraft paper pricing and demand, coupled with a greater impact from maintenance and project-related shuts. Proceeds from Russia exit underpins our OVERWEIGHT rating in the ST.
Key message: Pulp prices mostly stable and producers are targeting a $50/t increase in Europe. Graphic paper prices stable. Meanwhile, Billerud has backtracked on its planned 2% CFS increase in the US. Containerboard prices stable while OCC edges up further. Gas Futures in Europe now trading at €43/MWH.
Key message: Pulp prices stable to down yet producers are targeting a $50/t increase on the back of improved market conditions. Graphic paper prices continue to soften while Sappi boldly intends to keep prices stable for the rest of 2023. Containerboard prices still stable while OCC softens further. Gas Futures in Europe now trading at €35/MWH.