Citi sees European pulpwood price softness pressuring Stora and SCA

Investing.com -- China import softwood prices increased marginally week-over-week to $640 per ton while hardwood prices remained unchanged at $563 per ton, according to Citi. European hardwood and softwood prices declined approximately 1% week-over-week, marking the third consecutive weekly decrease.

The third quarter price is now up low single digits sequentially compared to mid single digits through the end of July. Containerboard prices continued to rise, with Testliner up 0.6% week-over-week and Kraftliner showing marginal gains. OCC spot prices increased slightly week-over-week, maintaining upward momentum into the third quarter of 2026 following a strong second quarter.

Shanghai softwood pulp futures showed gains, with the August NBSK contract price rising 3.8% in CNY terms on a week-over-week basis. In EUR terms, August future prices are up approximately 8% versus spot prices and approximately 7% versus the average third quarter price.

Citi expects the softening of European pulpwood prices over the past three weeks to negatively affect Stora Enso and SCA stock prices in the near term. Higher pulp prices benefit Stora Enso and SCA, while higher testliner prices help recycled board producers like Mondi, though higher OCC increases their costs.

Stora Enso, SCA, Billerud, Holmen and Mondi have exposure to kraftliner. Billerud, Holmen and Mondi also have exposure to graphic paper. Graphic paper prices showed mixed results across categories.

For the medium term, Citi indicates that supply and demand dynamics suggest 2026 average pricing could be higher year-over-year for pulp as new supply gets absorbed, higher for containerboard as demand recovers, and flat for graphic paper due to low utilization.

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