Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - Pulp is currently pulled by the trading logic of "strong supply" and "weak demand", lacking a clear short - term direction. The 05 contract is expected to fluctuate in the range of 5400 - 5700 yuan/ton [6] 3. Summary by Relevant Catalogs Pulp Price Data - **Futures Prices**: On January 6, 2026, SP2601 was 5528 yuan/ton with a daily increase of 1.02% and a weekly decrease of 0.65%; SP2609 was 5648 yuan/ton with a daily increase of 1.55% and a weekly decrease of 0.25%; SP2605 was 5612 yuan/ton with a daily increase of 1.48% and a weekly decrease of 0.32% [6] - **Spot Prices**: Coniferous pulp Silver Star was 5600 yuan/ton, Russian Needle was 5400 yuan/ton with no daily or weekly change; Broadleaf pulp Golden was 4720 yuan/ton with a daily increase of 0.43% and a weekly increase of 1.07% [6] - **Foreign Quotes and Import Costs**: For example, Chilean Silver Star's foreign quote increased by 2.94% month - on - month, and its import cost increased by 2.91% month - on - month; Brazilian Goldfish's import cost increased by 3.66% month - on - month [6] Pulp Fundamental Data - **Supply - Side**: In November 2025, the import volume of coniferous pulp was 72.5 tons with a month - on - month increase of 4.92%, and that of broadleaf pulp was 176.5 tons with a month - on - month increase of 33.92%. Suzano announced a full - scale price increase for global broadleaf pulp in January 2026 [6] - **Demand - Side**: Pulp demand has been stable recently. The price of tissue paper has risen slightly, and the prices of other paper products are stable. The production of major wood - pulp paper products is stable [6] - **Inventory - Side**: As of January 4, 2026, the inventory of mainstream pulp ports in China was 199.7 tons, a cumulative increase of 9.1 tons from the previous period, a month - on - month increase of 4.8%. The inventory has shifted to a cumulative trend, ending five consecutive weeks of destocking [6]

Group 1: Report Industry Investment Rating - No information provided Group 2: Report's Core View - Pulp has intense competition between the "strong supply" and "weak demand" narratives recently, and is highly volatile due to market macro funds. It is recommended to wait and see [6] Group 3: Summary by Related Catalogs Pulp Price Data - Futures prices of SP2601, SP2609, and SP2605 on December 31, 2025, were 5460 yuan/ton, 5570 yuan/ton, and 5532 yuan/ton respectively, with daily decreases of 0.66%, 0.61%, and 0.65%, and weekly decreases of 1.66%, 1.59%, and 1.57% [6] - Spot prices of coniferous pulp Silver Star, Russian Needle, and broadleaf pulp Golden were 5600 yuan/ton, 5400 yuan/ton, and 4700 yuan/ton respectively on December 31, 2025, with the Golden having a daily and weekly increase of 0.64% [6] - Foreign offers of Chilean Silver Star, Brazilian Goldfish, and Chilean Venus were 700 dollars/ton, 560 dollars/ton, and 620 dollars/ton respectively, with monthly increases of 2.94%, 3.70%, and 0.00% [6] - Import costs of Chilean Silver Star, Brazilian Goldfish, and Chilean Venus were 5721 yuan/ton, 4587 yuan/ton, and 5073 yuan/ton respectively, with monthly increases of 2.91%, 3.66%, and 0.00% [6] Pulp Fundamental Data - In November 2025, imports of coniferous pulp were 72.5 tons, a 4.92% increase from October; imports of broadleaf pulp were 176.5 tons, a 33.92% increase from October [6] - The pulp shipment volume to China in November 2025 was 178 thousand tons, a 3.00% increase [6] - National production of broadleaf pulp and chemimechanical pulp in different weeks from November 13 to December 25, 2025, showed certain fluctuations [6] - As of December 25, 2025, pulp port inventory was 190.6 tons, a decrease of 8.7 tons from the previous period, a 4.4% decrease; futures delivery warehouse inventory was 10.1 tons [6] - Production of finished paper such as offset paper, coated paper, tissue paper, and white cardboard in different weeks from November 13 to December 25, 2025, also showed certain fluctuations [6] Supply, Demand, and Inventory - Suzano announced a full - scale price increase for global broadleaf pulp in January 2026, with a 20 - dollar increase in Asia and a 120 - dollar increase in Europe and North America for Golden broadleaf pulp [6] - The demand side remains weak. Among mainstream wood - pulp papers, the price of cultural paper continues to decline, while tissue paper and white cardboard have a slight increase [6] - As of December 25, 2025, the sample inventory of China's main pulp ports was 190.6 tons, showing a de - stocking trend for five consecutive weeks [6]

Summary of Key Points from the Conference Call Industry Overview - The report focuses on the **Global Pulp & Paper** industry, specifically highlighting price movements and market dynamics related to **Bleached Eucalyptus Kraft Pulp (BEKP)** and **Bleached Softwood Kraft Pulp (BSKP)** prices in Asia, Europe, and North America [2][3]. Price Movements - **Suzano** has announced a price increase of **US$20/t** for BEKP in Asia and **US$120/t** in Europe and North America for January, following a previous increase of **US$20/t** on December 15 [2]. - Current imported prices for BEKP have risen to the **US$550-570/t** range [2]. - Daily resale prices for BEKP have remained stable at approximately **US$560/t** [3]. Factors Influencing Price Increases - Several factors are contributing to the upward trend in pulp prices: - **Woodchip prices** have increased by **US$30-40/t** since July [2]. - A clearer supply outlook for 2026 is anticipated due to changes in production capacities [2]. - Maintenance downtimes in Q4/Q1 are expected to remove approximately **450kt** of pulp from the market [2]. - Price hikes in paper products, particularly in China, are also influencing pulp prices [2]. Market Challenges - The near-term outlook for price increases appears more challenging due to: - Resistance from buyers, as domestic woodchip prices have recently declined [3]. - Thin margins for paper mills, despite attempts to raise prices [3]. - An increase in BHK production in China as mills revert from softwood [3]. Investment Recommendations - The report recommends a **Buy** rating for the following companies: - **Suzano** with a price target of **R$64** [4]. - **UPM** with a price target of **€27.10** [4]. - **International Paper (IP)** with a price target of **$53** [4]. Key Data Points - **China Daily Resale Prices**: BEKP at **US$561/t** (+US$1/t week-over-week); BSKP Futures at **US$683/t** (+US$6/t week-over-week) [5]. - **China Woodchip Prices**: Imported hardwood chips at **US$179/t** (-4% month-over-month); domestic hardwood chips at **US$148/t** (-2% week-over-week) [5]. - **China Pulp Stockpiles**: Total at **2,361kt**, a decrease of **33kt** week-over-week [5]. - **China Pulp Prices**: BHK at **US$535/t** (+US$7/t month-over-month); BSK at **US$661/t** (+US$5/t month-over-month) [5]. Risks and Considerations - The pulp and paper sectors in Latin America are subject to high volatility and various risk factors, including commodity price fluctuations, regulatory changes, production disruptions, and labor issues [12]. - UPM's operational leverage to currency rates and prices is mitigated by its global reach and product diversification [13]. - IP's volumes are influenced by macroeconomic factors, and any decline in economic activity could negatively impact demand [14]. This summary encapsulates the critical insights and data from the conference call, providing a comprehensive overview of the current state and outlook of the Global Pulp & Paper industry.

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core View of the Report - The implementation of the new round of price increase letters is good, domestic inventory has been reduced, and the market should be viewed with a bullish bias in a volatile manner [5][6] 3. Summary by Relevant Catalog Paper Pulp Price Data - **Futures Prices**: On December 26, 2025, SP2601 was at 5564 yuan/ton with a 0.58% daily and 2.47% weekly increase; SP2609 was at 5662 yuan/ton with a 0.21% daily and 2.54% weekly increase; SP2605 was at 5630 yuan/ton with a 0.46% daily and 2.25% weekly increase [6] - **Spot Prices**: Coniferous pulp silver star was at 5600 yuan/ton, coniferous pulp Russian needle was at 5400 yuan/ton, and broadleaf pulp Golden was at 4670 yuan/ton, with no daily change for silver star and Russian needle, and a 0.43% weekly increase for Golden [6] - **Foreign Quotes**: Chilean silver star was at 700 dollars/ton with a 2.94% monthly increase, Japanese Meigeng was at 580 dollars/ton with a 3.57% monthly increase, and Chilean Venus was at 620 dollars/ton with no change [6] - **Import Costs**: Chilean silver star was at 5721 yuan/ton with a 2.91% monthly increase, Brazilian Goldfish was at 4749 yuan/ton with a 3.53% monthly increase, and Chilean Venus was at 5073 yuan/ton with no change [6] Paper Pulp Fundamental Data - **Supply**: In November 2025, the import volume of coniferous pulp was 72.5 tons and broadleaf pulp was 176.5 tons, with monthly increases of 4.92% and 33.92% respectively. Suzano announced a global price increase for broadleaf pulp in January 2026, with a 20 - dollar increase in Asia and a 120 - dollar increase in Europe and North America for Goldfish broadleaf pulp [6] - **Inventory**: As of December 25, 2025, the sample inventory of China's major pulp ports was 190.6 tons, a decrease of 8.7 tons from the previous period, a 4.4% decrease. The inventory has been decreasing for five consecutive weeks [6] - **Demand**: The demand side remains weak. Among mainstream wood - pulp papers, the price of cultural paper continues to decline, while the prices of tissue paper and white cardboard have slightly increased [6]

Core Insights - Mercer International Inc. has commenced operation of a carbon dioxide (CO₂) capture demonstration unit at its Mercer Peace River pulp mill in Alberta, in collaboration with Svante Technologies Inc. [1][2] - The pilot project aims to evaluate Svante's solid sorbent carbon capture technology on biogenic CO₂ emissions from the mill's recovery boiler flue gas [1][3] - The demonstration is expected to last six months and will generate data to support future engineering phases and long-term planning for carbon capture technology [2][3] Company Overview - Mercer International Inc. is a global forest products company with operations in Germany, the U.S., and Canada [4] - The company has a consolidated annual production capacity of 2.1 million tonnes of pulp, 960 million board feet of lumber, 210 thousand cubic meters of CLT, 45 thousand cubic meters of glulam, 17 million pallets, and 230,000 metric tonnes of biofuels [4]

Core Points - B&W Canada has secured a contract exceeding $10 million from Irving Pulp & Paper Limited for the installation of boiler equipment [1] Company Summary - B&W Canada is involved in the installation of boiler equipment, indicating a focus on the energy and manufacturing sectors [1] - The contract with Irving Pulp & Paper Limited highlights B&W Canada's capabilities and market presence in the pulp and paper industry [1] Industry Summary - The pulp and paper industry is actively investing in equipment upgrades, as evidenced by the significant contract awarded to B&W Canada [1] - The installation of boiler equipment is crucial for operational efficiency and sustainability in the pulp and paper sector [1]

Core Viewpoint - Suzano, the world's largest pulp producer, has launched a new fluff pulp production line in Brazil, significantly increasing its production capacity [1] Group 1: Investment and Capacity Expansion - The new fluff pulp production line at the Limeira unit represents an investment of R$490 million [1] - This investment increases Suzano's total fluff pulp production capacity by over 400%, from 100,000 tonnes to 440,000 tonnes per year [1] Group 2: Production Flexibility - The project involved converting the existing pulp line at the Limeira unit into a flexible machine [1] - The new machine is capable of producing both Eucafluff® and market pulp [1]

Summary of Suzano's Investor Day Conference Call Company Overview - **Company**: Suzano - **Industry**: Pulp and Paper Key Points and Arguments Strategic Focus - Suzano is transitioning from a five-pronged strategy to a focus on two main avenues: competitiveness and value extraction from existing projects [2][4] - The company is finalizing a cycle of capital allocation, with significant investments in projects such as Cerrado, Limeira, and Aracruz [3][4] Market Outlook - Forecasts a solid growth of hardwood pulp demand, estimating an increase of 4.5 million tons until 2029, driven by tissue grades, paperboard, and specialty papers [6][7] - The share of hardwood pulp is expected to grow, with an additional demand of 700,000 tons in 2025 alone [8] Competitive Landscape - Verticalization in China is a concern, with 6 million tons of hardwood pulp projects confirmed, potentially reducing the addressable market for Suzano [10][11] - The company is monitoring the dynamics of operating rates and wood chip availability, which could impact costs [12][13] Demand and Supply Dynamics - Demand growth is projected at 3.1 million tons until 2029, while supply capacity is expected to increase by 4 million tons, leading to a demand-to-capacity ratio below optimum levels [16][17] - The current market scenario is unsustainable, with 15 million tons of pulp production losing money [21] Innovations and Initiatives - Suzano is actively engaging over 70 customers in its fiber-to-fiber agenda, achieving a 12 percentage point increase in hardwood usage among a control group of tissue players [26] - The company is investing in enhanced eucalyptus fibers to improve product quality and performance [28] Consumer Goods Strategy - In Brazil, Suzano has achieved an 18% price premium compared to competitors, with plans to increase market share through brand innovation and product launches [33][34] - The joint venture with Kimberly-Clark is expected to close by mid-2026, aiming for operational gains of $175 million [36][38] Competitiveness in Paper and Packaging - Suzano is focusing on reducing cash costs and improving competitiveness in its paper and packaging business, with a target of 21% cash cost reduction over the coming years [46][48] - The company is expanding its operations in the U.S. and leveraging long-term contracts to enhance market position [42][44] Sustainability and Forest Management - Suzano's forestry strategy emphasizes resilience against climate change, with investments in silviculture and genetics to increase productivity [53][54] - The company is committed to sustainability, with 40% of its debt linked to sustainability targets [62] Financial Projections - Projected total operational disbursement of BRL 1,983 per ton in 2027, reflecting a disciplined approach to cost management [59] Additional Important Content - The company is utilizing digital tools to enhance operational efficiency, including the use of digital twins in production processes [50][51] - Suzano's sustainability strategy is integrated across all business units, focusing on water, climate, biodiversity, and social impact [61][62]

Strategy and Focus - The company aims to enhance competitiveness and drive value creation by focusing on strategic levers such as pulp capacity expansions in Latin America and Asia, and the acceleration of new integrated capacity in China[5, 7, 10] - A key strategic goal is deleveraging towards a net debt/adjusted EBITDA ratio of less than 2.5x[10] - The company is focusing on extracting value from previous capital allocation decisions and accelerating the fiber-to-fiber (F2F) strategy[10] - The company is implementing cost reduction initiatives, aiming for R$80 million to R$115 million in total cost reduction by 2026[101] Pulp & Paper Market Dynamics - The market for BHKP (Bleached Hardwood Kraft Pulp) is experiencing organic growth, with a CAGR of +2.1% expected from 2024 to 2029, increasing from 41.4 Mt to 45.9 Mt[14, 17] - BHKP is gaining market share in BCP (Bleached Chemical Pulp), with an estimated 700 kt of F2F demand in 2025[20] - New confirmed BHKP integrated capacity is projected to reach 6.0 Mt between 2025 and 2029[29] Financial Management - The company is adopting a more conservative approach towards its net debt target, aiming for a net debt/adjusted EBITDA ratio of less than 2.5x[149] - The company has successfully issued debt in 2025 below its bond curve, with the 2036 bond achieving the company's lowest G-Spread ever[150] - The company is protecting cash flow exposure against FX risk through a consistent hedging policy[156]

Core Insights - Suzano has launched its Nature Strategy, emphasizing the importance of biodiversity in its business operations and decision-making processes [1][5] - The strategy is developed in collaboration with IUCN and follows a science-led approach based on the mitigation hierarchy: avoid, reduce, restore, and transform [2][4] - The company has identified 125 endangered species within its operational territories, with 24 prioritized for conservation actions [3] Group 1: Nature Strategy Development - The Nature Strategy incorporates the STAR metric to map sensitive areas and identify endangered species, guiding priority actions for their conservation [3] - The internal analysis for the strategy covers 2.9 million hectares of land owned by the company, expanding to about 10 million hectares when including analyzed watersheds [4] - The strategy aligns with global biodiversity goals, including the Kunming-Montreal Global Biodiversity Framework [6] Group 2: Stakeholder Engagement - The development of the Nature Strategy involved over 25 stakeholders, including experts, government representatives, academia, NGOs, and local communities, ensuring diverse perspectives [7] - The strategy aims to connect 500,000 hectares of forest fragments and enhance water availability in critical watersheds [6] Group 3: Industry Context - The global biodiversity situation is concerning, with 75% of terrestrial ecosystems altered by human activity and approximately 25% of assessed species endangered [5] - Suzano's commitment to biodiversity is seen as essential for the resilience of its business and the communities it serves [5]