Bradesco BBI sees no indicators of continued rally and stays cautious with the sector, whereas Morgan Stanley sees potential enhance in outlook
Suzano (SUZB3) introduced on Monday that it’s going to elevate the value of hardwood pulp by $30 per tonne for all Asian markets from June.
The pulp and paper producer acknowledged that the readjustment is as a result of technique of stock build-up by conventional prospects within the Chinese language market, in addition to demand from mixed pulp and paper producers, who purpose to scale back manufacturing charges. Susanoo added that resale costs for lumber are on the rise in China.
Bradesco BBI notes that Suzano has not launched its newest internet value for the Chinese language market, regardless that the most recent information reported costs round $450 per ton (which implies Suzano raised costs to $480 per ton).
“We don’t count on a gradual upward development in pulp costs going ahead, as we nonetheless consider that oversupply out there will make new initiatives tougher. We notice that Arauco not too long ago acknowledged that he expects costs to remain decrease for longer (costs are beneath $500 a ton), Whereas RISI reported that the majority suppliers meant to maintain costs steady for a number of months as a result of they have been involved about issues with pulp oversupply and overcapacity as we entered a seasonally weaker demand interval,” the analysts notice.
BBI analysts proceed to advocate Poor efficiency (Beneath Market Common, Equal to Promote) of SUZB3 inventory, value goal of R$54 (or potential upside of 20% in comparison with the day gone by’s shut). For Klabin (KLBN11), the advice is impartial.
Morgan Stanley is extra bullish and has a advice obese (above common publicity, equal to purchase) for Susanoo inventory.
For analysts, if the introduced value enhance is maintained, BEKP (Bleached Brief Camphor Fiber Pulp) costs in China might attain round US$500 per ton in June. This suggests a slight enhance within the forecast of $500/tonne of BEKP China forecast for Q2 2023 (2Q23), the place they have been assuming a value of $460/tonne for Might and June.
“The announcement, in our view, signifies that the corporate sees an enchancment in market situations in China. We count on BEKP and BSKP to be [celulose branqueada de fibra longa] from China will common $575/tonne and $629/tonne in 2023, respectively, they famous.
It must be famous that within the midst of the current decline within the shares of the sector and the situation by which the core could attain the value ground, analysts confirmed extra optimism with Susanoo and Clapin.