Pulp & Paper Feedback From Brazil Pulp Week

Equity Research 14 August 2026 | 12:05PM BRT

Pulp & Paper: Feedback From Brazil Pulp Week

With a sector conference taking place in Sao Paulo, we met and had conversations Marcio Farid | with several of our industry contacts. Participants were mainly pulp sellers, paper Goldman Sachs do Brasil CTVM S.A. producers, western traders and consulting firms (limited participation from Henrique Marques European and Asian side). | Goldman Sachs do Brasil CTVM S.A. The overall mood continues to be bearish and conversations are dominated by the Emerson Vieira ongoing integration trend in China as well as excess paper capacity exports having a | negative price and volume impact in regional markets. Goldman Sachs do Brasil CTVM S.A.

But we highlight some key specifics topics discussed:

n Asia wood price momentum. Indonesia wood imports have been on the rise potentially in anticipation of OKI start up and also as APRIL has not fully recovered some of its forest licenses lost. In the short term, forest logistics in China have also been constrained due to the rainy season (we saw similar constraints from May to Nov 2025). The bulls argue this could provide a higher floor for pulp prices. Our concern is that domestic and imported wood prices remain too competitive vs. imported pulp, so downside risk remains. n Demand seasonality to help (we don’t think is enough): China buying has been very weak YTD (and also availability), and demand tends to improve post summer time (early channel checks suggest China buying interest has also increased as prices fall to around $550/t). Our view is that China buyers are anchored on past experiences (e.g., prices reaching below $500/t over the last cycles) and also based on short term expectations (we do not see buyers concerned about lack of pulp availability in the short to mid term). So some restocking in August-September could help price stability, but pressure is likely to mount again into YE. n Softwood pricing and future demand a question mark. With more than 20% of supply having shut down in the last 10 years and with prices being below costs for 80% of the global production, softwood demand continues to decline and price support has been minimal. Conversations suggest softwood demand continues to be weak and the grade will likely be seen as a niche small market. The question remains on how small, and how long it will take for demand stability to be reached, and what happens to profitability and operating rates in the meantime.

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n Wood cost and availability in Brazil still on the rise. The combination of inflationary pressure, declining productivity yields, rising competition with corn ethanol and between pulp producers themselves, continue to put pressure on wood prices and availability in Brazil (namely, in Mato Grosso do Sul state). We see limited room to change that dynamic in the short term in Latam and our concern is that Asia, particularly China, has room to improve forest competitiveness (low base starting point), which could allow them to close the forest competitive gap in the next 5 years. n China and Indonesia paper exports hurting regional producers. Regional paper producers (in the Americas and in EMEA) have noted growing competition with China paper exports (across different grades) and our channel checks suggest Asian producers plan to continue to increase exports to help fulfill some of the low utilized capacity (e.g., avg utilization in China at 60%). The industry is particularly concerned about a potential separation of Essity’s consumer tissue business in case that were to land in a pulp producers’ hands.

China FOEX hardwood imported pulp prices were flat at…