Pulp & Paper How Long Does a Bear Cycle Last

Equity Research 24 July 2026 | 4:15PM BRT

Pulp & Paper: How Long Does a Bear Cycle Last?

China pulp negotiations have advanced with some deals concluded at $560/t for the Marcio Farid | month of July. Our channel checks suggest full order book have not yet been Goldman Sachs do Brasil CTVM S.A. reached. Major local Chinese producer, Asia Symbol, have announced an RMB 100/t Henrique Marques re sale price increase on the back of typhoon related woodchips disruptions and | improving re-sale markets. But re-sale prices are yet to recover, paper prices remain Goldman Sachs do Brasil CTVM S.A.

weak, and current prices levels are insufficient to incentivize restocking and Emerson Vieira | des-incentivize supply, which are usually the drivers of prices upside. Goldman Sachs do Brasil CTVM S.A. Based on historical data (chart below), hardwood bear cycles last for 39 weeks and prices are usually down by 30% (or by $233/t). We are 5 weeks into a downward trend and prices have decline by $36/t or by 6%. With the price downside starting at a much lower starting point for this cycle, we would not expect the downward trend to be as significant as the historical average, but do not think price support will be found before Chinese marginal cost or a price level that is seen by the industry as sufficient low, which we think is below $500/t.

Exhibit 1: Pulp downcylcle duration and intensity

W1 W4 W7 W10 W13 W16 W19 W22 W25 W28 W31 W34 W37 W40 W43 W46 W49 W52 W55 W58 W61 W64 W67 W70 W73 W76

Jun 2010 - Nov 2011 May 2013 - Jun 2014 Sep 2015 - Sep 2016 Nov 2018 - Feb 2020 Apr 2021 - Nov 2021 Nov 2022 - May 2023 Aug 2024 - Jan 2025 Apr 2025 - Aug 2025 May 2026 - Present

Source: RISI, Goldman Sachs Global Investment Research

China FOEX hardwood imported pulp prices declined by $13/t to $569/t, while domestic resale prices were flat at $549-550/t. On the softwood side, imported FOEX prices were flat at $646/t, while domestic resale prices ranged from RMB -27/t to 15/t w/w, to the equivalent of $591-636/t.

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Exhibit 2: Hardwood domestic resale prices vs. Hardwood Exhibit 3: Softwood domestic resale prices vs. Softwood PIX China price (in USD) PIX China price (in USD)

Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26 Jul-26 Jul-22 Sep-22 Nov-22 Jan-23 Mar-23 May-23 Jul-23 Sep-23 Nov-23 Jan-24 Mar-24 May-24 Jul-24 Sep-24 Nov-24 Jan-25 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26 Jul-26

Hardwood domestic resale price Hardwood PIX China price Softwood domestic resale price Softwood PIX China price

Source: RISI, Goldman Sachs Global Investment Research Source: RISI, Goldman Sachs Global Investment Research

China n China’s pulp imports decreased 4% m/m and y/y in June. Total pulp imports reached 2.0 mt in June, mainly on lower imports for hardwood (-9% m/m) partially offset by higher volumes for softwood (+6% m/m). YTD imports are up 1%.

Exhibit 4: China’s hardwood and softwood imports (kt)

1,800 1,650 1,500 1,350 1,200 1,

Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25 Jun-25 Sep-25 Dec-25 Mar-26 Jun-26

n China’s woodchip imports decreased 4% m/m and 8% y/y in June. June imports declined sequentially, while prices are showing some normalization (albeit at high levels). We think weak imported volumes are the result of better economics of domestic wood chips, and would in theory translate in lower Vietnam imported prices. But in view of the recent typhoon events in China this might be delayed.