Argentine pulp and paper manufacturer Celulosa files for bankruptcy protection, blaming Javier Milei’s government for creating a bad business environment for local industry. https://t.co/NgdXNRXtkK ...

1. Report Industry Investment Rating - The investment view on pulp is "oscillation", with a trading strategy of "11 - 1 positive spread arbitrage" [4] 2. Core View of the Report - Pulp futures are expected to oscillate due to rising foreign market quotes, low pulp futures valuation, and weak commodity macro - sentiment [4] 3. Summary by Related Catalogs 3.1 PART ONE: Main Views and Strategy Overview - **Supply**: Suzano announced price increases in September 2025, with a $20/ton increase in Asia and an $80/ton increase in Europe and the US. Consecutive increases in foreign market quotes strongly support domestic pulp prices [4] - **Demand**: The monthly output of major finished paper increased, but the prices of mainstream finished paper are at a low level. Some white cardboard and offset paper mills issued price increase letters, and the implementation remains to be confirmed [4] - **Inventory**: As of August 28, 2025, the inventory of mainstream pulp ports in China was 2084,000 tons, a decrease of 48,000 tons from the previous period, a month - on - month decrease of 2.3%, showing a de - stocking trend [4] - **Valuation**: The basis of broad - leaf pulp strengthened to over - 1000 yuan, and pulp futures entered a low - valuation range [4] - **Investment and Trading**: The pulp market is expected to oscillate. The trading strategy is a 11 - 1 positive spread arbitrage, and attention should be paid to commodity macro - sentiment [4] 3.2 PART TWO: Review of Futures and Spot Market - **Futures**: Pulp futures fell with the commodity macro - sentiment last week, but the spot price only slightly declined, and the basis strengthened significantly. There is still an upward driving force after the second round of foreign market quote increase [7] - **Spot**: The price of broad - leaf pulp is stable, while the price of softwood pulp decreased. The price of softwood pulp Silver Star is 5700 yuan/ton, a week - on - week decrease of 70 yuan/ton and a month - on - month decrease of 150 yuan/ton; the price of softwood pulp Buzhen is 4980 yuan/ton, a week - on - week decrease of 90 yuan/ton and a month - on - month decrease of 200 yuan/ton; the price of broad - leaf pulp Jinyu is 4150 yuan/ton, unchanged week - on - week and a month - on - month increase of 60 yuan/ton [16] - **Foreign Market Quotes**: In August, Arauco's quote for softwood pulp Silver Star was $720/ton, and the supply of broad - leaf pulp Star decreased by 50% with a price of $520/ton. Suzano announced price increases in September 2025 [21] - **Total Holdings**: As of August 29, 2025, the total holdings of pulp futures contracts were 360,884 lots, an 18.35% increase from the previous week; the holdings of the main pulp futures contract were 210,805 lots, a 13.86% increase from the previous week [22] 3.3 PART THREE: Pulp Supply and Demand Fundamental Data - **Import Volume**: In July, the import volume of pulp decreased. The total pulp import volume was 2.877 million tons, a 5.08% decrease; the softwood pulp import volume was 646,000 tons, a 4.72% decrease; the broad - leaf pulp import volume was 1.351 million tons, a 5.85% decrease; the broad - leaf wood chip import volume was 1.341 million tons, a 3.79% increase [5] - **Domestic Inventory**: The pulp port and warehouse receipt quantities decreased. As of August 28, 2025, the port inventory was 2.084 million tons, a 2.25% decrease; the delivery warehouse inventory was 247,500 tons, a 1.66% decrease [5] - **Overseas Inventory**: Pulp mill inventories increased, and European port inventories decreased. In July 2025, the European port pulp inventory was 1.5275 million tons, a 1.9% month - on - month decrease [46] - **Downstream Demand**: - **Prices**: The prices of four major wood - pulp papers decreased. As of August 29, 2025, the price of offset paper was 4825 yuan/ton, a 3.4% month - on - month decrease; the price of coated paper was 5000 yuan/ton, a 6% month - on - month decrease; the price of tissue paper was 5583 yuan/ton, unchanged month - on - month; the price of white cardboard was 3930 yuan/ton, a 1.6% month - on - month decrease [51] - **Output**: In July 2025, the output of paper products increased month - on - month. The output of offset paper was 737,000 tons, a 7% month - on - month increase; the output of coated paper was 381,000 tons, a 4% month - on - month increase; the output of tissue paper was 786,000 tons, a 1% month - on - month increase; the output of white cardboard was 1.003 million tons, a 3.5% month - on - month increase [56] - **Inventory**: The inventories of cultural and living papers decreased, while the inventory of white cardboard increased. As of July 2025, the inventory of offset paper was 1.73 million tons, a 5.8% month - on - month decrease; the inventory of coated paper was 1.178 million tons, a 4.2% month - on - month decrease; the inventory of tissue paper was 390,000 tons, a 2.5% month - on - month decrease; the inventory of white cardboard was 2.2781 million tons, a 4% month - on - month increase [61] - **Offset Paper**: As of August 29, 2025, the total offset paper inventory was 1.728 million tons, a 0.7% week - on - week increase; the output was 204,700 tons, a 3000 - ton week - on - week decrease; the capacity utilization rate was 55.6%, a 0.83% week - on - week decrease; the production cost was 4885 yuan/ton, a 0.05% week - on - week decrease; the gross profit was - 42.74 yuan/ton, a 26.4 - yuan week - on - week increase [67][72][75] - **International Demand**: European pulp demand is recovering, while US demand is weakening. In July 2025, the available days of European softwood pulp inventory were 27.2, a 1.3 decrease month - on - month; the available days of broad - leaf pulp inventory were 24.1, a 2.5 decrease month - on - month. As of July 2025, the capacity utilization rate of US paper products was 82.92%, a 0.30% month - on - month decrease; the inventory - to - sales ratio in June 2025 was 1.06, a 0.01 increase month - on - month [78] 3.4 PART FOUR: Pulp Futures Valuation - **Basis and Spread**: As of August 29, 2025, the basis of Shandong Russian softwood pulp was - 38 yuan/ton, an 84 - yuan increase from the previous week; the basis of Shandong Silver Star was 682 yuan/ton, a 104 - yuan increase from the previous week; the 9 - 1 month spread was - 378 yuan/ton, a 72 - yuan decrease from the previous week [88] - **Import Profit**: As of August 29, 2025, the import profit of softwood pulp was - 129 yuan/ton, a 76 - yuan decrease from the previous week; the import profit of broad - leaf pulp was - 43 yuan/ton, a 47 - yuan increase from the previous week [92] - **Needle - Broad Spread**: As of August 29, 2025, the needle - broad spread in Shandong, China, was 1562 yuan/ton, a 100 - yuan increase from the previous week; in July 2024, the needle - broad import ratio in China was 0.48, a 0.01 increase from the previous month [94]

Group 1: Suzano S.A. (SUZ) - Suzano S.A. is a eucalyptus pulp and paper products company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 1.5% over the last 60 days [1] - The company has a PEG ratio of 0.10, significantly lower than the industry average of 0.50, and possesses a Growth Score of B [1] Group 2: LATAM Airlines Group S.A. (LTM) - LATAM Airlines Group S.A. is a passenger and cargo air transportation services company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 13.6% over the last 60 days [2] - The company has a PEG ratio of 0.47, slightly lower than the industry average of 0.49, and possesses a Growth Score of A [2] Group 3: Montrose Environmental Group, Inc. (MEG) - Montrose Environmental Group, Inc. is an environmental services company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 123.8% over the last 60 days [3] - The company has a PEG ratio of 1.17, significantly lower than the industry average of 5.07, and possesses a Growth Score of A [3]

Newly independent Global Cellulose Fibers business will be wholly focused on delivering industry-leading absorbent fluff pulp used primarily in personal care products NEW YORK, Aug. 21, 2025 /PRNewswire/ -- American Industrial Partners ("AIP"), a focused industrials investor, today announced its affiliate has signed a definitive agreement to acquire the Global Cellulose Fibers division ("GCF") of International Paper (NYSE: IP). GCF is the leading global producer of high-quality absorbent fluff pulp for a wi ...

Core Viewpoint - International Paper is undergoing significant strategic changes, including the sale of its Global Cellulose Fibers business to American Industrial Partners for $1.5 billion, aimed at enhancing its focus on sustainable packaging solutions and improving its cost position [2][3]. Group 1: Sale of Global Cellulose Fibers Business - The sale of the Global Cellulose Fibers (GCF) business is valued at $1.5 billion, with adjustments including preferred stock issuance of $190 million [2]. - The GCF business generated $2.8 billion in revenue in 2024 and employs 3,300 people across nine manufacturing facilities [3]. - The transaction is expected to close by the end of the year, pending regulatory approvals [2]. Group 2: Strategic Changes in North America - International Paper is investing $250 million to convert the 16 machine at the Riverdale mill in Selma, Alabama, to produce containerboard [6]. - The company will permanently close the Savannah containerboard mill, Savannah packaging facility, and Riceboro mills, resulting in a net reduction of approximately one million tons in annual containerboard capacity [7]. - These changes will impact around 1,100 hourly and salaried positions, with the company committed to providing severance packages and outplacement assistance [4][5]. Group 3: Management Insights - The CEO of International Paper expressed confidence in the transition of GCF to AIP, highlighting the business's alignment with strategic customers and its potential for long-term success [3]. - AIP's partner noted GCF's strong position for future growth, supported by sustainable resources and long-term customer relationships [3].

Financial Data and Key Metrics Changes - The company reported that sales, operational cash generation, and EBITDA were in line with expectations for the quarter [10] - Net debt remained stable at $13 billion, with net leverage increasing to 3.1 times due to a reduction in last twelve months EBITDA to $4.2 billion [28] Business Line Data and Key Metrics Changes - The paper and packaging business in Brazil saw stronger sales volumes and lower costs compared to Q1, with EBITDA growth year-over-year [12] - U.S. operations experienced a 3% price increase quarter-over-quarter driven by product mix and better commercial location, although EBITDA was negatively impacted by lower volumes and higher costs due to maintenance [13][12] Market Data and Key Metrics Changes - In Brazil, print and write demand rose 6% year-over-year, while uncoated wood-free paper demand remained stable in North America and Latin America but declined 10% in Europe [14] - The U.S. market for boxboard demand was stable, with a 1% increase in demand for SBS boards [15] Company Strategy and Development Direction - The company is focusing on competitiveness and cost reduction, with expectations of lower cash costs in the upcoming quarters [10] - A deal with Eldorado is expected to provide an internal return of around 20%, allowing for increased production at the Ribba's mill without significant investment [7][8] Management's Comments on Operating Environment and Future Outlook - Management highlighted a positive outlook for cash cost trends and emphasized the importance of maintaining competitiveness in a challenging market environment [10][76] - The company is preparing for various scenarios in the global market and aims to improve operational efficiency [85] Other Important Information - The company is not currently planning significant new investments but is focused on executing existing projects and deleveraging [10][86] - The company has built inventories in the U.S. to mitigate the impact of 50% import duties imposed by the U.S. government [17] Q&A Session Questions and Answers Question: What are the changing dynamics in the pulp scenario? - Management noted high order intake levels in China and a supportive environment for price increases due to restocking movements and production recovery [32][34] Question: What is the internal rate of return for the deal with Eldorado? - The expected internal rate of return is around 20%, driven by optimized harvesting and reduced operational costs [40][42] Question: What is the expected CapEx trend for 2026? - The company anticipates a declining trend in CapEx, although specific numbers will be disclosed later [84] Question: How are negotiations regarding the 10% tariff going? - The company successfully negotiated that customers will bear the 10% tariff, ensuring that Suzano will not absorb this cost [95] Question: What is the status of the Kimberly Clark acquisition? - Dedicated teams have been established to plan the carve-out of the new joint venture, with the project progressing as planned [96]

Financial Performance - Sales volume reached 3.3 million tons in 2Q25, compared to 2.7 million tons in 1Q25 and 2.5 million tons in 2Q24[6] - Adjusted EBITDA was R$6.1 billion in 2Q25, versus R$4.9 billion in 1Q25 and R$6.3 billion in 2Q24[6] - Operating cash generation amounted to R$4.1 billion in 2Q25, up from R$2.6 billion in 1Q25 but down from R$4.5 billion in 2Q24[6] - Cash cost ex-downtimes was R$832/ton in 2Q25, compared to R$859/ton in 1Q25 and R$828/ton in 2Q24[6] - Net debt stood at US$13.0 billion in 2Q25, slightly higher than US$12.9 billion in 1Q25 and US$12.0 billion in 2Q24[7] - Leverage was 3.1x in US$ in 2Q25, compared to 3.0x in 1Q25 and 3.2x in 2Q24[7] Pulp and Paper Business - Paper sales were 348 thousand tons in 2Q25, compared to 329 thousand tons in 1Q25 and 270 thousand tons in 2Q24[6] - Pulp sales volume increased to 3,269 thousand tons in 2Q25 from 2,651 thousand tons in 1Q25 and 2,545 thousand tons in 2Q24[12] - Pulp business adjusted EBITDA margin was 52% in 2Q25[12] Financial Management - Notional value of the current portfolio was US$6.8 billion as of June 2025[22]

Summary of the Conference Call on the Pulp & Paper Industry Industry Overview - The China pulp market is currently in a fragile equilibrium, with good pulp sales recently but negative macro sentiment affecting trading and growth uncertainties [1][2] - Paper production has decreased by 2% year-to-date, while pulp supply is growing rapidly, leading buyers to perceive no risk of deficit for restocking [1][2] Key Points - **Market Sentiment**: Confidence levels among buyers and sellers are low, limiting significant price movements in the short term. Industry participants are holding onto unclear and potentially unsustainable reasons to support pricing [2][3] - **Price Trends**: Pulp prices are expected to remain relatively flat until the end of summer, but a potential cyclical rebound could occur towards year-end as low prices impact producers' balance sheets [3][19] - **Production and Inventory**: - Pulp inventories at Chinese ports decreased by 2% month-over-month to 2.1 million tons, still 14% above the 5-year historical average [19] - Paper output in China increased by 4% month-over-month and 5% year-over-year in July, with utilization rates remaining flat at 59% [21] Pricing Data - China FOEX hardwood imported pulp prices decreased by $3 per ton to $495 per ton, while domestic resale prices ranged from $488 to $492 per ton [10] - Softwood imported FOEX prices also decreased by $3 per ton to $687 per ton, with domestic resale prices ranging from RMB -27 to 1 per ton [10] Margins and Production Costs - Paper margins in China were flat to down in July, primarily due to a slight decline in paper prices across all grades, despite lower pulp prices partially offsetting this decline [13] - The cash cost curve in China remains deflationary, allowing production to remain resilient at low prices [1] European Market Insights - European containerboard prices were broadly flat in July, with Kraftliner prices up by 2% and Testliner down by 3% [25] - European graphic paper prices decreased, with coated and uncoated woodfree prices down by 2% and 3% month-over-month, respectively [28] Company-Specific Insights - UPM's management indicated a negative outlook for pulp, citing macro uncertainties and declining orders, leading to planned shutdowns of certain mills [34] - SCA's management noted a challenging market for European containerboard, with negative price movements due to oversupply and tariff discussions [35] - Altri's management highlighted that hardwood pulp prices are close to marginal costs and may stabilize soon, with European prices expected to follow China's trend with a delay [35] Latin America Market Data - In Brazil, corrugated box shipments decreased by 2% year-over-year and 6% month-over-month in June, with year-to-date shipments at 2.0 million tons, reflecting a 1% year-over-year decline [36] Investment Ratings - Various pulp and paper companies in Latin America have been rated with target prices and upside potential, with Suzano SA rated as a "Buy" with a target price of $65.00, reflecting a 24.6% upside [38] Conclusion - The pulp and paper industry is facing a complex landscape characterized by fragile market conditions, fluctuating prices, and varying production outputs. Investors should remain cautious and monitor macroeconomic factors that could influence market dynamics.

Core Insights - Mercer International reported a wider net loss and a year-over-year decline in both earnings and revenue for Q2 2025, with GAAP EPS at $(1.29) and revenue at $453.5 million, below estimates of $476.7 million [1][2] - The company suspended its regular dividend to preserve cash amid worsening profitability and uncertain market recovery [1][9] Financial Performance - Q2 2025 GAAP EPS was $(1.29), a decline of 27.7% from Q2 2024's $(0.96) [2] - Revenue for Q2 2025 was $453.5 million, down 9.2% from $499.4 million in Q2 2024 [2] - Operating EBITDA turned negative at $(20.9) million, a significant drop from a gain of $30.4 million in the previous year, indicating serious cost and pricing pressures [2][5] Segment Performance - Pulp segment revenue fell approximately 10% year-over-year to $332.3 million, with NBSK pulp prices declining 7% to $758 per air-dry metric ton [2][6] - Solid Wood segment revenue decreased by 10%, with a notable 65% drop in revenue from mass timber products due to reduced project activity [2][7] Strategic Focus - The company focuses on producing Northern Bleached Softwood Kraft (NBSK) pulp and solid wood products, with a strategy centered on cost-efficient manufacturing and sustainability [3][4] - Mercer holds a monopoly as Germany's only NBSK producer and is investing in products linked to global carbon-reduction trends [4] Challenges and Outlook - The company faces challenges from currency movements, high input costs, and weak demand in key markets, particularly China [8][12] - Management did not provide formal financial guidance but indicated that softwood pulp prices are likely to decrease, while lumber prices may rise [11]

Financial Data and Key Metrics Changes - The company reported a negative EBITDA of $21 million for Q2 2025, a significant decrease from the positive EBITDA of $47 million in Q1 2025, primarily due to foreign exchange impacts and lower pulp prices in China [3][11][20] - The consolidated net loss for Q2 was $86 million, or $1.29 per share, compared to a net loss of $22 million, or $0.33 per share in Q1 [11] - Cash consumption increased to $35 million in Q2 from $3 million in Q1, driven by lower EBITDA [11] Business Line Data and Key Metrics Changes - The pulp segment had a negative EBITDA of $10 million in Q2, while the solid wood segment reported a negative EBITDA of $5 million [3][26] - NBSK pulp sales realizations decreased in Q2, with the net price in China dropping to $734 per tonne, a decrease of $59 from Q1 [4] - Lumber production decreased by 6% to approximately 120 million board feet in Q2 due to planned maintenance [9] Market Data and Key Metrics Changes - In North America, the average list price for MBSK increased by $67 to $18.20 per tonne, while the European price remained stable at $15.53 per tonne [4] - The average price for NBHK in China decreased by $45 to $533 per tonne [5] - Pulp sales volumes decreased by 51,000 tons to 427,000 tons in Q2 due to weaker demand [5][6] Company Strategy and Development Direction - The company launched the "One Goal 100" program aimed at achieving $100 million in cost savings and operational efficiencies by 2026 [10][14] - The company plans to reduce capital expenditures to about $100 million in 2025, focusing on maintenance and safety projects [34] - The company is exploring a carbon capture project at the Peace River Mill, which could generate significant revenue from CO2 credits [35][70] Management's Comments on Operating Environment and Future Outlook - Management highlighted that trade uncertainty and tariffs have negatively impacted Q2 results, particularly affecting demand from China [13][19] - The company expects pulp prices to remain weak through the summer but anticipates a recovery in Q4 as demand picks up [22][66] - Management remains optimistic about the long-term value of pulp and the growth potential of mass timber products [36][33] Other Important Information - The company suspended its dividend as a prudent measure to focus on debt reduction amid market uncertainties [19] - The company reported a strong liquidity position of $438 million at the end of Q2, including $146 million in cash [12] Q&A Session Summary Question: Can you provide information on cash flow items for 2025? - The company expects cash taxes for the year to be about $25 million, with a slight negative working capital change anticipated [39][44] Question: What is the minimum liquidity level the company is comfortable with? - The company is not concerned about liquidity and has room to adjust capital expenditures if needed [51][54] Question: Can you comment on softwood inventory levels and potential write-downs? - The company does not foresee any impairments on softwood inventories, although levels are slightly elevated [58] Question: What could catalyze pulp prices gaining momentum later in the year? - The company expects restocking demand after the low summer season to drive pulp prices up, particularly for softwood [66] Question: How significant is the carbon capture project at Peace River? - The project could generate over $100 million per year in revenue from CO2 credits, with a capital requirement of around $100 million for the company's share [70][74] Question: How is the Torgau mill positioned for the U.S. market? - The Torgau mill is equipped to supply the U.S. market and is expected to increase production capacity [78][80]