RECOVERED FIBRE>>NORTH AMERICAN EXPORT MARKET>> Patty Norris, International Forest Products Corp.
It’s a very confusing, difficult market to read. Prices to a main port China are running around $200 CIF, which results back to maybe a $115 New York dock heavyweight price—but you can’t really buy at that price right now.
I don’t know if the market is going to fall or stay the same. My gut tells me it’ll probably level out and we’ve reached the bottom for now. Then because of short generation it’ll probably move up a little—not a lot—in July and August. I don’t think we’ll go back up to where we were.
It’s been a strange market all year. Normally in January and February prices fall, but they went up this year. Basically, right now prices usually go up because of lack of generation but they have fallen instead.
I think the biggest driver right now is that China is not aggressive. They have a lot of finished goods in warehouses and they are slowing down their paper machines. But other markets like India and South America have stepped up, and our own domestic mills are buying a lot. I don’t think China’s stepping out has affected the market as much as people had thought, but we’ve had significant decreases. In May you still had to buy at $160 short ton-dock, today you can buy at $125 all day long. Supply is good for now, but traditionally this is when supply starts to dry up—especially as we get closer to July.
One interesting aspect is that we’re starting to see steamship lines starting to deal [and not hold to previous higher rates].
Patty Norris can be contacted at PattyN@ifpcorp.com.