2023-06-30 02:55:33
© Reuters. Fitch logo in London, UK 2/3/2016 REUTERS/Reinhard Krause
By Marion Giraldo
MEXICO CITY (Reuters) – Latin American pulp and paper companies such as Suzano (BVMF:) and Chile’s Arauco will benefit from an expected rise in pulp prices after a sharp drop in recent months, he said on Thursday. Fitch Ratings risk rating agency.
In an analysis, Fitch estimated that an improvement in demand and a drop in inventories will take medical pulp prices exported to China to around 650 dollars per ton in 2023, above the minimum level of 460 dollars seen last May.
The estimate, anyway, would still be approximately 25% below the prices of 860 dollars per ton recorded between July and October 2022.
The stabilization of the price of the material essential for the elaboration of the paper should maintain the current perspectives for the corporate debt profiles of companies in the sector in the region, after a complex period in 2022, Fitch said.
Still, the report warned that the recent drop in pulp prices this year will lead to a drop in average revenue and cash flow for pulp and paper companies in 2023 and 2024, despite plans by some of them to improve production.
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