Forestry & Paper Weekly Insights
Key message: Concerns around recycling in Europe and potential temporary lay-offs across ¬¬graphic paper producers.
Suzano: Largest producer of market pulp
Key message from Suzano’s COVID update today: “Preparing for the worst and hoping for the best”. Still expect to increase pulp production and sales this year and to lower cash costs further.
MM Karton: Europe’s largest carton producer
Key message from our recent call with MM Karton: Order books are strong, for now. Balance sheet strongest amongst most Paper and Packaging peers.
Klabin: Largest packaging producer in Brazil
Key message from our recent call with Klabin: Pulp demand holding up and supply/demand balance improving. Paper packaging performing well, but pressure seen on industrial sacks due to construction slowdown.
Mayr-Melnhof Karton Q4 19A: Global leader in recycled fibre-based cartonboard
Key message: Continuous demand expected for cartonboard packaging, despite low economic momentum in Europe.
Lenzing Q4 19A: VSF specialty leader
Key message: VSF conversion margins close to all-time lows, but Lenzing believes there is limited downside to VSF pricing.
Navigator Q4 19A: Europe UWF market leader
Key message: Navigator is calling the bottom of the price cycle for Pulp; European benchmark prices have been stable for some weeks and prices in China have slightly increased YTD.
Read-through from Stora Enso’s Q4 19A results
Key message: Record CFs despite challenging conditions. However, pricing weakness continues to overshadow self-help.