Sodra Predicts Increasing Pulp Price on Rising Client Demand

Sodra AB, a Swedish member-owned wood products and pulp producer, said increased demand is likely to allow the company to increase prices for bleached softwood pulp at least once before the end of November.

Clients are now taking out more than their contracted volumes of NBSK, Magnus Bjorkman, head of Sodra Cell International, the Vaexjoe, Sweden-based company’s sales unit, said by telephone today. The price is typically increased by $20 to $40 per ton each time prices are raised, he said.

Several pulp producers will carry out maintenance in September and October, which will help tighten the market, Bjorkman said. Supply has also been reduced by the closing of Sodra’s Tofte pulp mill in August, after the attempt to find a buyer failed. The closure took 400,000 tons of production capacity out of the market, leaving Sodra with three pulp mills with a total annual production capacity of 1.6 billion tons.

“There is a good balance between supply and demand,” Bjorkman said. “I would be surprised if there wasn’t at least one price increase before the end of November.”

Sodra on Aug. 28 announced a new price for NBSK of $880 per ton as of Sept. 1, lower than the $890 per ton it had previously said it would start charging clients from May 1. While producers who were less booked than Sodra didn’t implement the price increase in May, there is now full market acceptance for the September price, Bjorkman said. Softwood pulp is made from spruce and pine and makes up 90 percent of Sodra’s production.

To contact the reporter on this story: Janina Pfalzer in Stockholm at jpfalzer@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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