January 14

World Pulp Monthly

Analysis and Forecasts of the
International Pulp Market

Global BHK Pulp Summary

Mill Risk We are becoming somewhat more positive about the strength of the BHK market in 2014.
Chinese BHK demand in 2013 was stronger than expected, in part due to closures of "backward"
Identify market BHK pulp capacity. We are also now not convinced by the early indications late last year that printing &
mills at risk of closure over writing (P&W) paper demand fell in China in 2013. This could be an issue of continuity of data
the next two years
for all of the paper demand preliminary estimates that we have for China for last year. We may
For more details visit: have to revise upward our forecasts for BHK demand in China in 2014 and 2015.
www.risi.com/BHKPmillrisk In the very near term, the BSK market is flat to up in terms of pricing and at or near the top
of the cycle. The BHK market should be picking up strength on a seasonal basis. However,
the weight of the coming wave of capacity expansion in South America and China is already
weighing on prices, especially in China. The UKP market remains quite tight, with a very
small price gap between bleached and unbleached softwood kraft pulp in China.
Our forecast has the world economy improving notably in 2014 and again in 2015. World
production of P&W paper is expected to rise in 2014 and 2015 after three consecutive years
of declines. This will give a modest boost to pulp demand.
On the supply side, there is nothing new to report regarding the Maranhão or Montes del
Plata projects. It appears that Oji's Nantong mill will be producing commercial tonnage by
April. Operating rates at Ilim's Bratsk mill in Siberia have been improving. Delays in these
projects, along with conversions to dissolving pulp and a couple of key mill closures, resulted
in an outright decline in market chemical papergrade capacity in 2013. Net capacity gains
in 2014 will be significant but not enough to lower industry operating rates to a depressed
level. We still believe there will be a price adjustment downward, but it will be concentrated
in the middle of 2014, when an unprecedented amount of capacity will be coming on stream
over a two-quarter period.
Prices for BHK are projected to reach variable (delivered cash) costs by the middle of 2014.
The price gap between BSK and BHK is currently about $100/tonne and will widen in the
months ahead. The widening price gap will make it more difficult for both BSK and BHK
prices to reach variable cost levels at the same time. We continue to look for a rebound in
prices in late 2014 and into early 2015. One reason for this is that there is likely to be a five-
quarter gap in time between the startup of the Montes del Plata mill and the next major BHK
line, CMPC's line at Guaíba.

Abbreviations:
To subscribe visit
www.risi.com/wpm BSK Bleached Softwood Kraft Pulp PAB Paper and Paperboard
BHK Bleached Hardwood Kraft Pulp P&W Printing & Writing
UKP Unbleached Kraft Pulp CNT Containerboard
Or contact client service at
MEC Mechanical Pulp FSC Forest Stewardship Council
Email: [email protected]
SEM Semichemical Pulp MPB Mountain Pine Beetle
Call: in North America
SIT Sulfite Pulp OFE Other Far East (Asia excluding China and Japan)
+1.866.271.8525
DP Dissolving Pulp BDMT Bone Dry Metric Ton
Outside the US & Canada
+32.2.536.0748
World Pulp Monthly - January 2014

Recent Developments
China BHK imports up solidly in 2013. Full-year trade numbers for China are now available and show a
stronger than expected increase in BHK imports in 2013. BHK imports in the fourth quarter surged to almost 1.8
million tonnes. For the year, they rose by 7.8%. In contrast, BSK imports were somewhat weaker than expected,
falling by slightly less than 2.0%.
There are several critical unknowns ("known unknowns") that figure into the interpretation of these numbers.
One is that it is still quite unclear how strong demand for printing & writing (P&W) paper was in 2013.
Preliminary estimates out of China—which became available late in 2013—indicate a decline in P&W demand
for the year, which is surprising but believable. Based on the preliminary P&W estimate, it seemed likely that
pulp consumption in China late last year had downshifted to a slower than expected growth rate. Subsequent
preliminary production estimates for other grades of paper in China (packaging and tissue) then were issued
and those came in very weak as well. Those estimates strain belief. We do not have good reasons for believing
that the growth rates of demand for containerboard and tissue dropped precipitously in 2013. We do not have
the final answer yet, but it seems quite possible that there is a discontinuity in the data—the 2013 preliminary
estimates may not be comparable exactly with the data for 2012 and before. If that is the case, then we might
have to abandon the idea that P&W demand dropped or that growth was close to zero in 2013. That would mean
that BHK demand is trending upward more strongly than we recently thought was the case.
A second major unknown is how much "backward" pulp and paper capacity is being closed in China. For at least
the past five years, the Chinese government has mandated that large amounts of backward capacity be closed
each year for economic and environmental reasons. There has been little evidence to support the view that these
plans were extensively carried out. In 2013, the new national government, whose economic policies are being
overseen by an economist by training, Premier Li Keqiang, adopted what appears to be a much more determined
attitude toward enforcing capacity closures, putting more pressure on local governments to follow through. This
applies well beyond the pulp and paper industry, which actually is not one of the largest sources of concern for
the government. The closure of backward pulp and paper capacity tends to promote the consumption of wood
pulp in the place of nonwood pulp. We have been expecting closures and a continuing shift from nonwood pulp
to wood pulp consumption in China, but it may be happening faster than we projected. This is consistent with the
stronger performance of BHK imports relative to BSK in 2013. Older nonwood paper machines require higher
loadings of BSK than do new machines, everything else equal, so the relatively better performance of BHK
imports is consistent with the capacity closure story.
We are in the process of doing our first five-year forecast of 2014, which will be completed in March. We will
be looking closely at the trajectory of BHK demand in China in 2014 and 2015. It is likely to be revised upward.
That, along with continuing removals of BHK capacity from the market (closures, conversions to dissolving pulp
and BSK), would point to the possibility that market conditions in 2014 could be somewhat firmer than expected.
Softwood market momentum slows. BSK prices are showing some continued upward momentum going into
February, with list prices rising in Europe and North America. Some of the gains in list price were offset by a
beginning-of-year rise in contractual discounts, making it more difficult to gauge the real price trend. Contract
prices in Europe remain below the announced list prices for December and prices in China did not move. But
spot prices in North America rose solidly in January, indicating that the market remained relatively tight, at least
in North America.
World-20 producers went into January with a seasonally adjusted 27.1 days of supply (which is balanced but not
tight), up by about 1.5 days compared to the end of December. This came after December World 20 shipments
fell marginally compared to November, counter to some expectations for a year-end bump in sales. There is some
seasonality at work here. The December/January period is typically a time of lower than normal consumption

2 RISI
 World Pulp Monthly - January 2014

of market BSK in the Northern Hemisphere as a whole. Demand will receive some seasonal support in the next
two or three months, and consumer stocks of BSK in Europe, as measured by Utipulp, are on the low side, at
19 days. There is of course seasonality on the supply side as well, with mills in the coldest parts of the Northern
Hemisphere normally not taking much if any scheduled maintenance downtime in January and February.
At the same time, we are seeing BSK imports into China from Russia rebounding substantially as the new line at
Bratsk runs at higher operating rates. The new line at Bratsk started operations in 2013 about two quarters behind
expectations. It has also had a slower than expected ramp-up, by about one quarter according to recent comments
from International Paper, a partner in the joint venture. China's BSK imports from Russia rose to 64,000 tonnes
in December, up from the recent low of 28,000 tonnes in October. Russian export data show exports of 84,000
tonnes to China in December, which is in the neighborhood of what we expect on average over time after the new
Bratsk line is fully ramped up. A portion of this surge in exports in December should show up in China's January
numbers for imports. International Paper reported in early February that the Bratsk mill produced 38,000 tonnes
of pulp in January. That is substantial progress, but is still, by our calculations, an operating rate of 68% for the
month, so we have not yet seen the full effect of this mill on BSK supply into China.
Grade substitution continues as well. There is BHK pulp capacity being swung over to BSK in North America
and Europe as the price gap between NBSK and NBHK exceeds $100/tonne. More of this will occur in the
months ahead. And BHK consumption is taking some furnish share from BSK, notably in China, in response to
the elevated gap in prices.
Overall, given our outlook for the paper markets in early 2014, we continue to think that BSK market momentum
has peaked or is close to peaking. It is likely that supply will more than keep pace with demand in the months
ahead and bring the upward trend in BSK prices to halt.
Conditions in the BHK market continue to be more mixed by comparison. The supply and demand dynamic
in the BHK market is unusually tricky right now. Demand is trending upward overall, especially in China, and
we are approaching a period of seasonal strength in North America and Europe, supported by higher production
of woodfree P&W papers and tissue papers. Consumer stocks of BHK in Europe, as measured by Utipulp, are
on the low side, at 19 days. Market BHK capacity is running behind year-ago levels, largely the result of grade
conversions to dissolving pulp over the past year. There is as yet no tonnage in the market from the three new
BHK lines that will be ramping up in the first half of 2014.
However, the new capacity is already weighing down prices, especially in China, as buyers anticipate further
weakness in BHK prices just over the horizon. Chinese buyers are especially reluctant to take large volumes,
except at lower prices. There are reports of some very large transactions occurring in China at prices substantially
below what most would consider the market level. Overall, we are seeing some unusual price movements across
regions, with spot and contract prices moving up marginally in North America in January, but staying flat or
moving slightly down in Europe. In China, the import price of BEK dropped marginally in January but the local
market price was flat for the month.
China's BHK demand reportedly waned in January. Purchases surged toward the end of 2013 and some buyers
have stepped back early in 2014, in part in anticipation of the slowdown in paper production during China's
Spring Festival. We have indications that a substantial volume of BHK from China and Indonesia is being sold
at prices below $600/tonne. Wood availability has become an issue in Indonesia due to wet weather and APRIL
took downtime at its Riaupulp operation in Indonesia. This was reported to be economic downtime and that
makes sense. Order intake was weak in January, wood was more expensive and pulp was being sold for less than
$600/tonne.
The inventory situation for World 20 BHK producers is being clouded by possible issues related to seasonal
adjustment. Here we have to dig into the statistical weeds a bit to briefly explain the situation. Over the past
three years, World 20 December BHK shipments have been much stronger than November shipments, averaging
a 14% gain month-over-month even after adjusting for number of days in the months. In addition, producer

RISI 3
World Pulp Monthly - January 2014

inventories have dropped quite sharply in December over the past three years. The explanation for the surge
in BHK shipments each December has been end of year sales by producers wanting to reduce working capital
at year end. In December of 2013, shipments again rose, but by only 4% month-over-month. Our seasonal
adjustment factors are such that this shows up as a strong underperformance compared to normal conditions. In
addition, producer inventories fell in December, but by much less than our seasonal factors indicate they should
have under normal conditions. The bottom line here is that World 20 BHK inventories in December dropped to
36.5 days (relatively low) not seasonally adjusted, but rose to 45.7 days (relatively high) on a seasonally adjusted
basis, both of which represent large moves from the prior month. With China now being such a large part of the
market, it is not clear to what extent normal seasonal patterns apply, so we have to be cautious here in drawing
conclusions about inventory levels going into January.
On the supply side, there are no major changes to report in the schedule of pulp line startups over the next two
quarters. We have received indications that the new Oji BHK line in China will start commercial operations in
April. Oji will be offering slurry pulp on the market until the pulp dryer starts up, reportedly in August. This may
limit how much pulp will actually be available to the market in the meantime. Suzano's new mill in Brazil started
operations in the final hours of 2013 and will ship its first pulp bales in February, to domestic customers. We are
awaiting the startup of the Montes del Plata operation in the first quarter.
On the other side of the supply ledger, Fortress Paper's Thurso mill in Canada, which had swung from dissolving
pulp to papergrade BHK after Chinese authorities imposed duties on Fortress DP imported into China, began
taking 10 weeks of market related downtime on December 22. This was likely a factor in the rise in spot BHK
prices in North America in January.

Table A
Pulp Demand Indicators

2013 2014 2015

Real GDP (% Change)
World 2.9 3.7 4.1
China 7.7 7.5 7.2
W. Europe -0.4 1.0 1.4
United States 1.9 2.8 3.3
Currencies vs. US$ *
US$ per Euro 1.36 1.28 1.27
US$ Per Canadian Dollar 0.95 0.92 0.94
Chinese RMB per US$ 6.09 6.00 5.91
Brazilian Real per US$ 2.28 2.43 2.36
Production of P&W Paper ** (% Change)
World -1.3 0.3 1.5
China 1.2 2.0 4.3
Western Europe -4.8 -2.6 -1.2
North America -2.6 -3.2 -1.6
Production of Tissue Paper *** (% Change)
World 4.3 5.0 4.9

* Fourth-quarter average
** Source: RISI graphic paper forecast
*** Source: RISI tissue paper forecast

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 World Pulp Monthly - January 2014

UKP market tight. A capacity closure in Russia in 2012, along with forward integration of unbleached softwood
kraft pulp capacity in Europe and South America, caused the world UKP market to become very tight in 2013 and
this situation continues to persist. The price gap between bleached and unbleached Chilean kraft pulp in China
narrowed once again in January. Chilean UKP in China stood at $720/tonne in January, only $10/tonne below the
price of bleached radiata kraft. Given the higher pulp yield and lower chemical costs for UKP, the gap normally
is much larger, perhaps $50/tonne. We suspect this could cause a small amount of additional consumption of
bleached softwood kraft pulp by packaging producers who can now put a white layer on their product rather
than a brown layer for a cost penalty of just $10/tonne of pulp. We also note that imported kraftliner into China
has recently been trading at $660/tonne, making rolled kraftliner a viable substitute for UKP among China's
containerboard producers. North American kraftliner producers might find a welcome home for tonnage they do
not want to put into a domestic market that is seeing relatively tepid demand recently. Otherwise, it is not obvious
what will bring the UKP market into more normal balance in the very near term. Some swing tonnage has entered
the market, specifically at Mondi's sack kraft line at Stambolijski in Bulgaria.
Fluff pulp prices heading higher? List prices of fluff pulp have been stable over the past several months in
both Europe and North America, even as papergrade BSK prices have been rising. The fluff market has seen US
pulp capacity swinging back to fluff pulp from DP duties in the wake of China's antidumping duties on US DP.
Several producers have announced $40/tonne hikes for February. There is some firm opposition in the market to
this hike so its fate is as yet unknown.
Canadian dollar again weaker than expected. The Canadian dollar slipped to $0.90 in early February, the
lowest level since 2009. This illustrates once again the rule that few developments in the markets last forever,
especially strong commodity and currency cycles. This variance with our forecast assumptions is starting to put
significant downward pressure on US dollar-denominated production costs, compared to what we have been
assuming, especially for NBSK. At this point, a $0.02 drop in the value of the Canadian dollar lowers dollar-
denominated Canadian variable production costs for NBSK by about $10/tonne. So the drop in the value of the
loonie from approximately $0.94 in November to $0.90 in early February puts about $20/tonne of additional
downside pressure on NBSK prices during weak market conditions. It is not clear that NBSK prices will reach
cash costs in 2014, but if they do, the recent move in the Canadian dollar will likely have no more than a $20/
tonne effect on the point at which prices stop falling. The value of the Canadian currency could also affect
production decisions at Fortress Paper's Thurso operation.
At the same time, the Brazilian Real is back down to around BRL 2.40/USD, still weaker than expected. At
this level, if it persists, Brazilian producers will be able to weather the downturn in prices better than expected.
The weaker Real will make it more expensive, in opportunity cost terms, for Brazilian producers to take market
related downtime during the upcoming weakening of BHK prices.

Drivers of Pulp Demand

The economy continues to improve, especially in the USA. Our macro projections show substantial
improvements in economic activity in 2014 in Europe and the United States, pushing global economic growth
up to 3.7% (previously 3.8%) for the year. Europe as a whole appears to be crawling out of recession. In the
United States, the private sector is actually showing pretty solid growth, buoyed by stronger auto sales and
housing starts, but the overall GDP number is being pulled down by the ongoing retrenchment and uncertainty
in the government sector. This uncertainty and fiscal drag are expected to abate in 2014.
We are again calling the recent high in the euro as the top and working under the assumption that its value will
slide gradually in 2014. While many analysts have reasonably emphasized the downside risk to the euro, readers
of this report will remember that in the past year we have called out the upside risk as well, if the European
economy starts to accelerate more than expected. The euro has seen several very strong runs over the past decade
and often moves against consensus expectations.

RISI 5
 World Pulp Monthly - January 2014

As for the Canadian dollar, RISI has changed its call for 2014, now seeing the loonie finishing the year around
$0.92. The Brazilian Real is expected to finish the year at close to recent levels relative to the US currency,
around Real 2.4/USD.
We estimate that world P&W production shrank by 1.3% in 2013, and will post a very small gain (0.3%)
in 2014. These numbers are subject to change as we examine recent estimates out of China for 2013. World
tissue production is projected to rise by 5.0% in 2014.

Outlook for Pulp Supply

On the capacity front the following developments are on our radar:
• Suzano's mill in Maranhão State commenced production of BEK in late December, and will ramp up
commercial tonnage to 1.5 million tonnes per year over the next several quarters.
• Montes Del Plata's 1.3 million tonne per year BEK mill is still scheduled for startup late in the first quarter
of 2014, after labor disputes delayed efforts to commission the project before the end of 2013.
• Indications are Oji has kicked off trials on its 700,000 tonne per year BEK pulp line in Nantong, Jiangsu
Province, which should allow for commercial production by April. The mill will produce slurry pulp until a
dryer unit is installed in the third quarter. Once operational, the mill will be capable of drying 450,000 tonnes
per year of pulp, with the balance being integrated with Nantong's existing 400,000 tonne per year coated paper
line. The company is also believed to have completed the conversion of its Yonago mill in Japan to DP.
• The Eldorado mill in Três Lagoas is believed to have completed the debottlenecking of its new pulp facility
in January. This expands the mill's BEK capacity by 200,000 tonnes to 1.7 million tonnes per year.
• Bratsk's new 720,000 tonne per year BSK line is making progress ratcheting production up to full capacity.
The mill began production in April 2013, but its ramp-up has been slower than planned, tapering BSK
availability to China. Production levels at the mill declined around the time of the startup as the old line was
closed while the new line was being started up.

Table B
Major Market Pulp Capacity Expansions (Q1 2014 - Q2 2015)
Thousand Tonnes

Company Location Country Grade (Type) Capacity Mkt Year Quarter

Suzano Imperatriz Brazil BHK (New Mill) 1,500 2014 1

Oji Yonago Japan BHK (Conversion to DP) -100 2014 1
Oji Nantong China BHK (New Line) 435 2014 1
Montes del Plata Punta Pereira Uruguay BHK (New Mill) 1,300 2014 1
Eldorado Três Lagoas Brazil BHK (Debottleneck) 200 2014 1
Hongyuan Fangchenggang China BHK/Bagasse (New Mill) 105 2014
Lontar Papyrus Jambi Indonesia BHK (Integration) -55 2014 2
CMPC Guaiba Brazil BHK (New Line) 1,300 2015 2
Double A Alizay France BHK (Restart) 130 2015 2

6 RISI
 World Pulp Monthly - January 2014

• Phoenix Pulp and Paper successfully converted BHK capacity to DP production at its Khon Kaen mill in
Thailand. The swing removed a little over 100,000 tonnes per year of market BHK from global capacity as
of third quarter 2013.
• After a short stint of swinging DP production to NBHK, Fortress Paper's Thurso mill is now in the middle
of market downtime as even BHK prices remain too low to run the mill profitably. The downtime should
take the mill past the February deadline the Chinese Ministry of Commerce has set to make its final ruling
on the DP dumping duties that were applied early in November. This decision will weigh heavily on how
Fortress will proceed at Thurso.
• The Lincoln Paper and Tissue mill has indefinitely idled the pulp line as management has deemed repairs
to the heavily damaged recovery boiler too costly to justify keeping the pulp line operational. Also affected
by the closure of the integrated pulp line is paper production; the mill has ceased all uncoated freesheet
production, shutting down both its paper machines. The mill consumed about 127,000 tonnes of pulp
annually when all lines were fully operational, according to RISI's Mill Intelligence.
• CMPC will have a new BEK line up and running by May of 2015 at its Guaíba mill in Rio Grande do Sul
State, adding an additional 1.3 million tonnes per year of BEK to the existing 400,000 tonne per year line.
The project is well under way and in the process of optimizing logistics to access wood fiber and exporting
new BEK capacity.
• Double A will restart the Alizay mill's pulp line, which it has acquired in a separate purchase from the paper
line the company currently operates. We initially estimate it will be capable of drying as much as 130,000
tonnes of BHK for the market, and the company reports the line will be operational by the first half of 2015.

Figure 1
China Bleached Kraft Spot Price Comparison
US Dollars and RMB per Tonne

7,000 $950 7,000 $950

BEK Local Price RMB
6,700 BEK Local US$ ex VAT $900
6,700 $900 BEK Import Price Ex 5% Disc US$
6,400 $850 6,400 $850
6,100 $800 6,100 $800
5,800 $750 5,800 $750
5,500 $700 5,500 $700
5,200 $650 5,200 $650
4,900 $600 4,900 $600
4,600 $550 4,600 $550
NBSK Local RMB
4,300 NBSK Local US$ ex VAT $500 4,300 $500
NBSK Import Price Ex 2% Disc US$
4,000 $450 4,000 $450
Jun-11
Sep-11

Jun-12
Sep-12

Jun-13
Sep-13
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Mar-13
Jun-13
Sep-13
Dec-13

Dec-11
Mar-12

Dec-12
Mar-13

Dec-13

RISI 7
World Pulp Monthly - January 2014

Outlook for Pulp Prices

In 2013, operating rates for chemical papergrade wood pulp averaged 93%, up from 92% in 2012. For 2014, we
are projecting a slight decline in the industry operating rate, to just under 93%—not a large drop but enough to
trigger a decline in prices. Operating rates in 2014 are likely to vary considerably over the course of the year. If
the capacity additions in BHK proceed as planned, Chinese buyers will be trying very hard to pull prices down
by mid-year by holding back on purchases, and then will be ordering in large amounts once prices have fallen to
levels that are seen as the bottom. So we think that operating rates will probably deviate pretty widely from the
average of 93% during the course of the 2014.
One risk to our operating rate outlook is that large buyers, especially in China, could receive below-market prices
for very large blocks of tonnage even before the market price hits bottom. In this case, the operating rate could
be elevated but would not be the best indicator of market strength.
Given the forecast for operating rates in mid-2014, net prices should drop to close to variable production costs
(basically delivered cash costs), especially for BHK, before rebounding in the second half of the year. (We
emphasize here that in the analysis below, the prices we are comparing to costs are net contract or spot prices,
not list prices.)
At what levels do we expect to find variable costs in 2014?
We first note that industry cost curves have been seeing big changes over the past six months or so, as the
currencies of some key pulp producing countries have weakened relative to the US dollar, while the euro has
strengthened. Some key cross rates have moved substantially against the interests of European pulp producers:

Figure 2
Seasonally Adjusted Producer Inventories of Chemical Grade Market Pulp (20 Countries)
Days of Supply

60

55

50
Average = 32.6 Days
45

40

35

30

25

December '13 = 35.6

20

15
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13

Source: PPPC, RISI

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 World Pulp Monthly - January 2014

the euro/Canadian dollar, euro/Real, euro/rupiah and euro/yen rates all posted large gains toward the end of 2013
in the direction of a stronger euro. As a result, dollar denominated production costs of European producers have
moved substantially upward relative to those of producers in Canada, Brazil, Japan and Indonesia, putting them
in a more difficult position ahead of the expected price downturn in mid-2014.
Presently, our BHK cost curve analysis for 2014 shows a lot of cost-side support for net prices in the mid-$500s/
tonne. Prices could fall below these support levels, but not for very long. For overseas suppliers to China, the
high-cost producers will average about $530-550/tonne delivered to China. Large local BHK mills in China have
variable costs of about $475/tonne, which would be closer to $500/tonne after adjusting for the lower price that
these producers receive for their product. In Europe, where European BHK producers dominate, there will be a
group of high-cost mills with variables costs of $500-530/tonne CIF. In North America, there will be a cluster
of domestic tonnage with a delivered cash cost to the USA at about $550/tonne. Of course, delivery costs to
various points in the USA vary widely and quoted prices are always delivered to the paper mill, not a seaport, as
is usually the case in Europe and China.
For BSK, we are not convinced that prices will fall to production costs. The price gap between BSK is likely to
widen from today's elevated level of about $100/tonne, making it more difficult for both BHK and BSK to reach
cash cost levels at the same time.
If BSK cash costs do turn out to be critical, our analysis indicates support for net prices in the low- to mid-$600s/
tonne. For the Chinese market, there will be cost-side support for NBSK in the range of $625-650/tonne. For
Western Europe, European NBSK producers will have delivered costs that top out around $650/tonne. For the
United States, the relevant Canadian NBSK mills will top out at around $600/tonne for delivery to the Midwest.
Pulp buyers in China are notably resolute in terms of holding out for surprisingly low prices, and we recognize
that they may be able to pressure producers enough to take net prices to levels that are lower than we are showing
here. But this will last only for a short period of time. Inventory restocking in China will pick up sharply once
the bottom in prices has been reached (or even before, if large blocks of discounted tonnage are moved at below-
market rates, as the market price is still in decline). In addition, low BHK prices in China will favor production

Figure 3
Bleached Kraft Pulp Imports into China
Thousand Tonnes/Month, Not Seasonally Adjusted

700 700
BSK Imports BHK Imports
600 600

500 500

400 400

300 300

200 200

100 100

0 0
1/06 1/07 1/08 1/09 1/10 1/11 1/12 1/13 1/14 1/06 1/07 1/08 1/09 1/10 1/11 1/12 1/13 1/14

RISI 9
World Pulp Monthly - January 2014

of high-quality woodfree papers based on virgin wood pulp. Prices of BHK-based paper will drop, so these
producers will take market share from producers using nonwood pulp or lower-quality mixed furnishes, which
are produced mostly with integrated pulp. This will help to boost Chinese BHK consumption and demand even
as market pulp mills are taking downtime.
There will be no more BHK capacity coming on stream until CMPC's Guaíba mill starts up in 2015, so Chinese
buyers will want to buy large volumes at low prices in 2014 in anticipation of a normal tightening of the market
as economic conditions improve throughout the year.
For 2015, we see operating rates rising again, but not sharply, for the year as a whole. The first half of the year
could be stronger than the second half, because of the more than one-year gap between the expected startup of
the Montes del Plata BHK mill and the expected startup of CMPC's new BHK line at Guaíba in May of 2015.

Figure 4
Western Europe Monthly Fine Paper Deliveries
Thousand Tonnes/Day, Three-Month Moving Average

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 World Pulp Monthly - January 2014

Figure 5
Western Europe Monthly Mechanical Paper Deliveries
Thousand Tonnes/Day, Three-Month Moving Average

Figure 6
European Consumer Pulp Inventories
Utipulp Seasonally Adjusted Days of Supply

Days of Supply (SA)

24

23

22

21

20

19

18

17

16 BSK DAYS SA BHK DAYS SA

Source: RISI, Utipulp
15
10 11 12 13 14

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World Pulp Monthly - January 2014

Figure 7
NBSK Effective List Price for Contract Transactions in Three Currencies
Currency Units per Tonne, Delivered to Northern Europe

Euros, $
1,200
US $ Canadian $ Euros
1,100

1,000

900

800

700

600

500

400
Source: RISI
300
98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14

Figure 8
Key Producer Exchange Rates
Canadian Dollar, Brazilian Real, and Indonesian Rupiah per Euro

1.70 3.40

1.60 3.20

1.50 3.00

1.40 2.80

1.30 2.60

1.20 2.40

1.10 CAD/EUR (left) IDR/EUR (left) BRL/EUR (right) 2.20

1.00 2.00
Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14

12 RISI
© 2014 RISI, Inc. All Rights Reserved.
Identify market BHK pulp mills at risk
of closure over the next two years

Included in RISI’s new study Global BHK Pulp Mill Risk:

• Assessment of all market BHK pulp lines in current operation

• Identification of specific BHK pulp lines and mills at risk of closure
- Which companies regions have the highest risk of closure
- Prices at which these mills will be likely to close down
- How company strategies affect shutdown risk

Learn more at
www.risi.com/BHKPmillrisk
 World Pulp Monthly - January 2014
1/31/2014

Table 1*
20 Country Chemical Paper Grade Market Pulp Summary
Thousand Tonnes, Seasonally Adjusted

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013

20 Major Producing Countries**

Shipments (Actual) 3,583 3,689 3,938 3,418 3,515 3,915 3,683 3,665 3,628 3,659 3,700 3,947 3,776 3,743 3,932
Shipments (Seas Adj) 3,677 3,705 3,589 3,549 3,655 3,694 3,801 3,748 3,621 3,786 3,776 3,755 3,870 3,746 3,586
%Ch - Year Earlier 11.7 3.3 -3.0 -3.4 -0.7 0.7 7.9 4.1 5.6 6.5 1.2 2.6 5.2 1.1 -0.1

Producer Inventories (Actual) 3,892 3,902 3,899 4,322 4,348 4,098 3,996 4,040 4,101 4,405 4,538 4,178 4,097 4,032 4,107 ***
Producer Inventories (Seas Adj) 3,811 3,876 4,008 4,206 4,177 4,220 4,199 4,280 4,390 4,263 4,188 4,126 4,003 4,005 4,253 ***
Days Of Supply 31.1 31.4 33.5 35.6 34.3 34.3 33.1 34.3 36.4 33.8 33.3 33.0 31.0 32.1 35.6

Capacity 3,932 3,953 3,943 3,927 3,916 3,934 3,958 3,975 3,955 3,930 3,909 3,915 3,924 3,938 3,972
Strike-Adj Capacity 3,932 3,953 3,943 3,927 3,916 3,934 3,958 3,975 3,955 3,930 3,909 3,915 3,924 3,938 3,972
Shipments/Capacity 0.94 0.94 0.91 0.90 0.93 0.94 0.96 0.94 0.92 0.96 0.97 0.96 0.99 0.95 0.90

PRICES AND COSTS

(US DOLLARS PER TONNE)
Delivered to N. Europe -- Effective List Prices for Contract Transactions
No. Bl. Softwood Kraft 790 810 810 825 830 840 850 860 860 860 860 880 895 905 905
No. Bl. Birch Kraft 765 775 775 790 795 810 815 820 820 800 790 765 765 775 775
No. Bl. Hardwood Kraft 735 740 740 750 750 760 770 770 770 750 740 725 725 730 730

So. Bl. Softwood Kraft 750 770 770 785 790 800 810 830 830 830 830 850 860 870 870
So. Bl. Hardwood Kraft 725 730 730 740 740 750 760 760 760 740 730 715 715 720 720

Bl. Brazilian Eucalyptus Kraft 765 775 775 790 795 810 815 820 820 800 790 765 765 775 775

Delivered to United States -- Effective List Prices for Contract Transactions

No. Bl. Softwood Kraft 850 870 870 890 900 900 930 930 950 950 945 945 970 990 990
No. Bl. Hardwood Kraft 735 745 755 770 785 820 835 850 875 875 875 870 860 860 860

So. Bl. Softwood Kraft 810 830 830 850 860 860 890 890 910 910 905 905 930 950 950
So. Bl. Hardwood Kraft 735 735 745 760 785 815 835 850 875 875 875 870 860 860 860

Bl. Brazilian Eucalyptus Kraft 820 820 830 840 850 870 870 890 895 895 880 870 860 860 860

Delivered to China -- Average Price -- Spot and Contract

No. Bl. Softwood Kraft 660 670 655 655 680 700 710 700 690 680 680 695 720 740 750

Bl. Radiata Pine Kraft 630 640 640 630 650 670 690 680 680 670 670 680 710 730 730

Bl. Eucalyptus Kraft 620 630 630 650 680 700 705 710 700 680 650 650 645 655 655

Avg Var. Cost Delivered to N. Europe, High Cost Region

Bl. Softwood Kraft 646 641 627 601 571 564 571 574 567 561 559 562 560 553 544
Bl. Hardwood Kraft 508 503 507 506 497 490 492 492 486 482 486 490 501 497 506

Price/Var. Cost Ratios Before Discounts, High Cost Region

Bl. Softwood Kraft 1.32 1.36 1.39 1.48 1.57 1.60 1.63 1.62 1.68 1.69 1.69 1.68 1.73 1.79 1.82
Bl. Hardwood Kraft 1.62 1.63 1.64 1.66 1.71 1.78 1.77 1.81 1.84 1.86 1.81 1.78 1.72 1.73 1.70

* Data revised December 2006, adding estimated German BSK, removing Portugal to conform to revised industry association reporting.
** Canada, United States, Finland, Sweden, Norway, Brazil, Chile, Argentina, Uruguay, Germany, Spain, France, Belgium, Austria, South Africa,
Swaziland, Morocco, New Zealand, Japan, South Korea. These countries represent 81% of world supply in 2006.
*** Estimated

14 RISI
 World Pulp Monthly - January 2014
1/31/2014

Table 2*
20 Country Chemical Paper Grade Market Pulp Summary
Thousand Tonnes, Seasonally Adjusted

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015

20 Major Producing Countries**

Shipments (Actual) 3,679 3,674 4,049 3,803 3,838 3,933 3,856 3,910 4,194 3,825 3,917 4,298 3,766 3,760 4,144
Shipments (Seas Adj) 3,820 3,820 3,820 3,925 3,925 3,925 3,990 3,990 3,990 3,920 3,920 3,920 3,910 3,910 3,910
%Ch - Year Earlier 7.6 4.5 3.4 3.3 4.7 8.4 5.4 5.7 6.3 1.3 4.6 9.3 2.4 2.4 2.4

Producer Inventories (Actual) 4,105 4,033 4,376 4,447 4,500 4,587 4,134 3,948 4,249 4,273 4,390 4,596 4,584 4,666 4,382
Producer Inventories (Seas Adj) 4,218 4,198 4,250 4,232 4,248 4,285 4,271 4,278 4,302 4,373 4,420 4,438 4,461 4,483 4,512
Days Of Supply 33.1 33.0 33.4 32.3 32.5 32.8 32.1 32.2 32.3 33.5 33.8 34.0 34.2 34.4 34.6

Capacity 4,010 4,045 4,079 4,113 4,144 4,156 4,165 4,173 4,176 4,179 4,181 4,178 4,174 4,173 4,189
Strike-Adj Capacity 4,010 4,045 4,079 4,113 4,144 4,156 4,165 4,173 4,176 4,179 4,181 4,178 4,174 4,173 4,189
Shipments/Capacity 0.95 0.94 0.94 0.95 0.95 0.94 0.96 0.96 0.96 0.94 0.94 0.94 0.94 0.94 0.93

PRICES AND COSTS

(US DOLLARS PER TONNE)
Delivered to N. Europe -- Effective List Prices for Contract Transactions
No. Bl. Softwood Kraft 915 925 925 925 925 910 895 880 880 890 900 910 920 930 930
No. Bl. Birch Kraft 770 775 775 765 745 715 700 700 700 725 750 760 770 770 770
No. Bl. Hardwood Kraft 730 735 735 725 705 675 660 660 660 685 710 720 730 730 730

So. Bl. Softwood Kraft 880 890 890 890 890 875 860 845 845 855 865 875 885 895 895
So. Bl. Hardwood Kraft 720 725 725 715 695 665 650 650 650 675 700 710 720 720 720

Bl. Brazilian Eucalyptus Kraft 770 775 775 765 745 715 700 700 700 725 750 760 770 770 770

Delivered to United States -- Effective List Prices for Contract Transactions

No. Bl. Softwood Kraft 1010 1010 1010 1010 1000 985 970 955 955 965 975 985 995 1005 1005
No. Bl. Hardwood Kraft 870 870 870 840 815 780 765 765 765 780 805 815 825 825 825

So. Bl. Softwood Kraft 970 970 970 970 960 945 930 915 915 925 935 945 955 965 965
So. Bl. Hardwood Kraft 870 870 870 840 815 780 765 765 765 780 805 815 825 825 825

Bl. Brazilian Eucalyptus Kraft 870 870 870 850 825 790 775 775 775 800 825 835 845 845 845

Delivered to China -- Average Price -- Spot and Contract

No. Bl. Softwood Kraft 750 760 760 760 750 720 700 700 710 720 730 740 750 750 750

Bl. Radiata Pine Kraft 730 740 740 740 730 700 680 680 690 700 710 720 730 730 730

Bl. Eucalyptus Kraft 645 645 635 615 590 590 600 610 620 630 650 660 670 670 680

Avg Var. Cost Delivered to N. Europe

Bl. Softwood Kraft 542 539 539 542 544 545 547 548 549 549 551 553 557 559 561
Bl. Hardwood Kraft 504 498 492 492 491 491 490 490 489 488 487 488 490 492 494

Price/Var. Cost Ratios Before Discounts

Bl. Softwood Kraft 1.86 1.88 1.87 1.86 1.84 1.81 1.77 1.74 1.74 1.76 1.77 1.78 1.79 1.80 1.79
Bl. Hardwood Kraft 1.73 1.75 1.77 1.73 1.68 1.61 1.58 1.58 1.59 1.64 1.69 1.71 1.72 1.72 1.71

* Data revised December 2006, adding estimated German BSK, removing Portugal to conform to revised industry association reporting.
** Canada, United States, Finland, Sweden, Norway, Brazil, Chile, Argentina, Uruguay, Germany, Spain, France, Belgium, Austria, South Africa,
Swaziland, Morocco, New Zealand, Japan, South Korea. These countries represent 81% of world supply in 2006.
*** Estimated

RISI 15
 World Pulp Monthly - January 2014
1/31/2014

Table 2* (cont.)
20 Country Chemical Paper Grade Market Pulp Summary

CANADIAN DOLLARS PER TONNE

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015

Delivered to N. Europe -- Effective List Prices for Contract Transactions

Exchange Rate (US$/C$) 0.94 0.93 0.93 0.93 0.93 0.93 0.92 0.92 0.92 0.92 0.92 0.92 0.92 0.92 0.93

No. Bl. Softwood Kraft 974 990 994 995 997 983 968 953 955 971 983 993 1,000 1,008 1,005
No. Bl. Birch Kraft 819 829 833 823 803 773 757 758 760 791 819 829 837 834 832
No. Bl. Hardwood Kraft 777 786 790 780 760 729 714 715 717 747 775 785 793 791 789

So. Bl. Softwood Kraft 937 952 956 957 960 945 930 916 917 933 944 955 962 970 967
So. Bl. Hardwood Kraft 766 776 779 769 749 718 703 704 706 736 764 775 782 780 778

Bl. Brazilian Eucalyptus Kraft 819 829 833 823 803 773 757 758 760 791 819 829 837 834 832

Delivered to United States -- Effective List Prices for Contract Transactions

No. Bl. Softwood Kraft 1,075 1,081 1,085 1,086 1,078 1,064 1,049 1,035 1,037 1,053 1,064 1,075 1,081 1,089 1,086
No. Bl. Hardwood Kraft 926 931 935 904 879 843 827 829 831 851 879 889 896 894 892

So. Bl. Softwood Kraft 1,032 1,038 1,042 1,043 1,035 1,021 1,006 991 993 1,009 1,021 1,031 1,038 1,046 1,043
So. Bl. Hardwood Kraft 926 931 935 904 879 843 827 829 831 851 879 889 896 894 892

Bl. Brazilian Eucalyptus Kraft 926 931 935 914 890 854 838 840 841 873 901 911 918 916 913

Delivered to China -- Average Price -- Spot and Contract

No. Bl. Softwood Kraft 798 813 817 818 809 778 757 758 771 785 797 807 815 813 811

Bl. Radiata Pine Kraft 777 792 795 796 787 756 735 737 749 764 775 785 793 791 789

Bl. Eucalyptus Kraft 686 690 682 662 636 637 649 661 673 687 710 720 728 726 735

EUROS PER TONNE

Delivered to N. Europe -- Effective List Prices for Contract Transactions
Exchange Rate (US$/Euro) 1.36 1.34 1.32 1.32 1.31 1.30 1.30 1.29 1.28 1.28 1.27 1.27 1.27 1.27 1.27

No. Bl. Softwood Kraft 673 690 700 703 706 698 691 682 685 696 706 715 724 732 732
No. Bl. Birch Kraft 566 578 586 581 569 549 540 543 545 567 588 598 606 606 606
No. Bl. Hardwood Kraft 537 549 556 551 538 518 509 512 514 536 557 566 575 575 575

So. Bl. Softwood Kraft 647 664 673 676 679 671 664 655 658 669 679 688 697 705 705
So. Bl. Hardwood Kraft 529 541 548 543 531 510 502 504 506 528 549 558 567 567 567

Bl. Brazilian Eucalyptus Kraft 566 578 586 581 569 549 540 543 545 567 588 598 606 606 606

Delivered to United States -- Effective List Prices for Contract Transactions

No. Bl. Softwood Kraft 743 754 764 767 763 756 748 740 744 755 765 774 783 792 791
No. Bl. Hardwood Kraft 640 649 658 638 622 598 590 593 596 610 632 641 650 650 650

So. Bl. Softwood Kraft 713 724 734 737 733 725 718 709 712 723 734 743 752 760 760
So. Bl. Hardwood Kraft 640 649 658 638 622 598 590 593 596 610 632 641 650 650 650

Bl. Brazilian Eucalyptus Kraft 640 649 658 646 630 606 598 601 603 626 647 657 665 666 665

Delivered to China -- Average Price -- Spot and Contract

No. Bl. Softwood Kraft 551 567 575 577 573 552 540 543 553 563 573 582 590 591 590

Bl. Radiata Pine Kraft 537 552 560 562 557 537 525 527 537 548 557 566 575 575 575

Bl. Eucalyptus Kraft 474 481 480 467 450 453 463 473 483 493 510 519 527 528 535

For information on contract discounts, see Table 5 footnotes

16 RISI
 World Pulp Monthly - January 2014
1/31/2014

Table 3*
Chemical Paper Grade Market Pulp
Shipments by Grade and Destination
Thousand Tonnes, Seasonally Adjusted

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013
SHIPMENTS BY GRADE
20 Major Producing Countries**
Shipments 3,677 3,705 3,589 3,549 3,655 3,694 3,801 3,748 3,621 3,786 3,776 3,755 3,870 3,746 3,586
%Ch Year Ago 11.7 3.3 -3.0 -3.4 -0.7 0.7 7.9 4.1 5.6 6.5 1.2 2.6 5.2 1.1 -0.1

Bleached Softwood Kraft

Shipments 1,823 1,905 1,796 1,794 1,870 1,904 1,871 1,879 1,863 1,965 1,922 1,835 1,961 1,877 1,814
%Ch Year Ago 15.0 8.9 -2.9 -4.5 0.9 3.0 4.7 4.0 3.3 12.1 2.6 -4.3 7.6 -1.5 1.0

Bleached Hardwood Kraft

Shipments 1,723 1,673 1,682 1,619 1,669 1,678 1,799 1,731 1,628 1,693 1,721 1,804 1,781 1,747 1,640
%Ch Year Ago 8.0 -2.3 -2.8 -3.1 -1.4 -0.7 11.3 3.5 8.2 1.4 -0.6 12.0 3.4 4.4 -2.5

Unbleached Kraft
Shipments 122 119 103 128 115 111 130 136 129 126 132 114 126 120 131
%Ch Year Ago 23.2 9.2 -1.9 14.3 -5.0 -7.5 20.4 29.5 21.7 6.8 17.9 -5.0 3.3 0.8 27.2

Sulfite
Shipments 9 8 8 8 1 1 1 2 1 2 1 2 2 2 1
%Ch Year Ago -30.8 -38.5 -38.5 -42.9 -92.9 -92.3 -91.7 -87.5 -92.9 -85.7 -92.9 -83.3 -77.8 -75.0 -87.5

SHIPMENTS BY DESTINATION
To North America 631 662 637 627 626 637 629 687 629 649 622 648 630 658 643
%Ch Year Ago 15.0 18.6 -1.3 8.4 6.7 10.1 3.3 12.2 5.8 9.2 0.4 4.0 -0.2 -0.7 0.9

To W. Europe 1,226 1,228 1,195 1,277 1,185 1,154 1,216 1,153 1,145 1,231 1,172 1,173 1,225 1,165 1,172
%Ch Year Ago 15.4 5.7 2.0 9.9 0.0 -0.4 4.2 -3.3 -4.1 4.6 -6.7 2.1 -0.1 -5.1 -1.9

To E. Europe 69 85 79 84 83 76 88 83 90 86 94 86 100 90 102

%Ch Year Ago -12.3 33.9 9.1 13.3 -10.1 -6.6 34.2 16.5 32.0 10.8 30.5 10.3 44.0 6.8 29.0

To Lat. America 258 272 257 262 268 256 292 279 267 255 266 266 265 259 260
%Ch Year Ago 0.5 8.7 -2.8 -2.5 -0.4 -8.7 14.7 4.0 7.4 -1.1 2.5 8.2 2.7 -4.6 1.3

To Japan 162 159 169 149 170 177 176 163 155 156 161 195 154 168 150
%Ch Year Ago -8.3 -8.7 9.9 -14.2 1.4 4.6 25.6 0.0 14.1 -1.9 6.1 23.1 -4.8 5.3 -11.3

To China 766 797 774 707 868 807 885 851 866 934 916 927 1045 894 779
%Ch Year Ago 3.4 -9.8 -16.3 -24.1 3.0 -2.2 9.6 3.5 11.9 7.6 4.7 5.2 36.5 12.1 0.7

To Other Asia/Africa 568 473 489 433 396 470 482 518 496 507 517 404 483 478 480
%Ch Year Ago 31.5 4.1 13.4 -10.9 -16.9 1.9 8.4 15.1 15.7 12.5 9.2 -13.6 -15.1 1.1 -1.7

To Oceania 25 21 24 26 22 26 26 23 27 25 23 27 25 28 28
%Ch Year Ago -8.0 -29.3 38.5 4.5 -16.0 18.1 21.8 -28.0 16.1 5.4 16.3 11.8 -0.3 30.4 15.4

* Data revised December 2006, adding estimated German BSK, removing Portugal to conform to revised industry association reporting.
** Canada, United States, Finland, Sweden, Norway, Brazil, Chile, Argentina, Uruguay, Germany, Spain, France, Belgium, Austria, South Africa,
Swaziland, Morocco, New Zealand, Japan, South Korea. These countries represent 81% of world supply in 2006.
*** Estimated

RISI 17
World Pulp Monthly - January 2014
1/31/2014

Table 4*
Chemical Paper Grade Market Pulp
Inventory and Days of Supply
Thousand Tonnes, Seasonally Adjusted

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2012 2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013

20 Major Producing Countries**

Inventories 3,811 3,876 4,008 4,206 4,177 4,220 4,199 4,280 4,390 4,263 4,188 4,126 4,003 4,005 4,253 ***
Days Of Supply 31.1 31.4 33.5 35.6 34.3 34.3 33.1 34.3 36.4 33.8 33.3 33.0 31.0 32.1 35.6

Bleached Softwood Kraft

Inventories 1,675 1,626 1,694 1,798 1,787 1,801 1,774 1,773 1,811 1,695 1,677 1,685 1,557 1,578 1,615 ***
Days Of Supply 27.6 25.6 28.3 30.1 28.7 28.4 28.4 28.3 29.2 25.9 26.2 27.5 23.8 25.2 26.7

Bleached Hardwood Kraft

Inventories 2,061 2,095 2,166 2,280 2,273 2,358 2,317 2,357 2,449 2,378 2,364 2,322 2,313 2,306 2,466 ***
Days Of Supply 35.9 37.6 38.6 42.2 40.9 42.2 38.6 40.8 45.1 42.1 41.2 38.6 39.0 39.6 45.1

Unbleached Kraft
Inventories 68 148 141 121 111 55 102 144 124 184 141 113 128 116 168 ***
Days Of Supply 16.7 37.3 41.1 28.4 29.0 14.9 23.5 31.8 28.8 43.8 32.0 29.7 30.5 29.0 38.5

Sulfite
Inventories 7 7 7 7 6 6 6 6 6 6 6 6 5 5 4 ***
Days Of Supply 23.3 26.3 26.3 26.3 180.0 180.0 180.0 90.0 180.0 90.0 180.0 90.0 75.0 75.0 120.0

* Data revised December 2006, adding estimated German BSK, removing Portugal to conform to revised industry association reporting.
** Canada, United States, Finland, Sweden, Norway, Brazil, Chile, Argentina, Uruguay, Germany, Spain, France, Belgium, Austria, South Africa,
Swaziland, Morocco, New Zealand, Japan, South Korea. These countries represent 81% of world supply in 2006.
*** Estimated

18 RISI
 World Pulp Monthly - January 2014

Table 5
Market Pulp Price Summary
US Dollars per Tonne

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
2012 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014

DELIVERED TO N. EUROPE -- EFFECTIVE LIST PRICES FOR CONTRACT TRANSACTIONS

Northern
Bl. Softwood Kraft 810 825 830 840 850 860 860 860 860 880 895 905 905 915
Bl. Birch Kraft 775 790 795 810 815 820 820 800 790 765 765 775 775 770
Bl. Hardwood Kraft 740 750 750 760 770 770 770 750 740 725 725 730 730 730

Southern
Bl. Softwood Kraft 770 785 790 800 810 830 830 830 830 850 860 870 870 880
Bl. Hardwood Kraft 730 740 740 750 760 760 760 740 730 715 715 720 720 720

Bl. Kraft Fluff (Untreated) 920 920 920 920 920 940 940 940 940 940 950 960 960 960

Bl. Eucalyptus Kraft 775 790 795 810 815 820 820 800 790 765 765 775 775 770

Bl. Hardwood CTMP 680 695 700 700 710 710 710 690 680 665 655 660 660 660

DELIVERED TO UNITED STATES -- EFFECTIVE LIST PRICES FOR CONTRACT TRANSACTIONS

Northern
Bl. Softwood Kraft 870 890 900 900 930 930 950 950 945 945 970 990 990 1,010
Bl. Hardwood Kraft** 755 770 785 820 835 850 875 875 875 870 860 860 860 870
Maple *** 765 780 795 830 --- --- --- --- --- --- --- --- --- ---
Mixed 755 770 785 820 835 850 875 875 875 870 860 860 860 870
Aspen 755 770 785 820 835 850 875 875 875 870 860 860 860 870

Southern
Bl. Softwood Kraft 830 850 860 860 890 890 910 910 905 905 930 950 950 970
Bl. Hardwood Kraft 745 760 785 815 835 850 875 875 875 870 860 860 860 870

Bl. Kraft Fluff (Untreated) 920 920 920 920 920 940 940 940 940 940 960 960 960 960

Bl. Eucalyptus Kraft 830 840 850 870 870 890 895 895 880 870 860 860 860 870

Bl. Softwood CTMP 735 755 765 765 795 815 835 835 830 830 855 875 875 895

Deinked Pulp 730 730 730 745 755 755 755 755 755 765 770 770 770 775

DELIVERED TO CHINA -- AVERAGE PRICE-- SPOT AND CONTRACT

Northern Bl. Softwood Kraft 655 655 680 700 710 700 690 680 680 695 720 740 750 750

Bl. Radiata Pine Kraft 640 630 650 670 690 680 680 670 670 680 710 730 730 730

Bl. Eucalyptus Kraft 630 650 680 700 705 710 700 680 650 650 645 655 655 645

* Denotes revision
** Reflects wet lap pulp prices as well as dried; not an average of the maple, mixed, and aspen prices.
*** Price index discontinued as of April 2013 due to declining market size
Prices are for delivery to the paper mill in North America and CIF port for Europe and China. Prices are reported before contract
discounts or performance rebates. For North America and Europe, contract discounts are mostly in the range of 18-25% in recent
months. Discounts are currently higher in North America than in Europe. Contract discounts are smaller in some cases, especially
for purchasers of very small volumes or buyers who are locked into multi-year contracts that specify the lower discount rates
that prevailed two or three years ago. In China, contract discounts of of approximately 1-3% apply for NBSK, and 3-5% for
BEK (up to approximately 8% for the largest buyers of BEK).

Readers should note that discounts are a moving target and that information about actual discounts is closely held and hard
to uncover, so the numbers above are approximations based on ongoing discussions with buyers and seller. Differences in discounts
can also reflect differences in freight costs, rather than in differences in mill nets, so these numbers must be used with caution.

RISI 19
World Pulp Monthly - January 2014
1/31/2014

Table 6
China Pulp Imports, by Supplying Region
Thousand Tonnes

Jun Jul Aug Sep Oct Nov Dec YTD YTD 12-Mo
2013 2013 2013 2013 2013 2013 2013 2014 2013 %Ch Total*

CHINA IMPORTS
BSK
Total 499 575 550 553 474 612 584 6,497 6,615 -2% 6,497
Canada 194 203 181 176 196 213 232 2,337 2,305 1% 2,337
United States 93 116 104 115 90 114 87 1,130 1,105 2% 1,130
South America 82 99 91 109 96 133 126 1,264 1,182 7% 1,264
Eastern Europe 54 65 66 46 28 41 64 616 607 2% 616
Western Europe 74 82 102 96 54 98 68 1,024 1,287 -20% 1,024
Oceania/Asia/Africa 3 11 7 11 10 13 7 126 130 -3% 126

BHK
Total 497 483 580 518 601 520 655 6,559 6,084 8% 6,559
South America 264 207 280 268 326 247 403 3,352 3,096 8% 3,352
Oceania/Asia/Africa 191 229 233 196 223 219 196 2,420 1,850 31% 2,420
Eastern Europe 10 13 9 12 9 6 11 150 236 -36% 150
Canada 4 19 16 12 8 10 15 197 326 -40% 197
United States 24 13 38 21 26 26 26 338 430 -21% 338
Western Europe 5 2 4 9 8 12 4 102 145 -30% 102

MEC
Total 95 121 115 119 100 95 108 1,387 1,417 -2% 1,387
Canada 77 97 94 94 88 76 94 1,113 1,137 -2% 1,113
Oceania/Asia/Africa 6 14 14 23 9 16 6 166 126 32% 166
Western Europe 2 3 1 2 0 1 1 22 31 -29% 22
Eastern Europe 11 7 6 1 2 3 8 85 123 -31% 85
United States 0 0 0 0 0 0 0 0 1 -84% 0
South America 0 0 0 0 0 0 0 0 0 N.C. 0

UKP
Total 37 38 36 32 49 31 57 523 679 -23% 523
Eastern Europe 6 7 10 6 7 6 8 106 202 -47% 106
United States 14 13 10 9 22 7 22 195 180 8% 195
South America 9 13 11 14 9 8 12 117 109 7% 117
Oceania/Asia/Africa 2 1 1 1 2 4 7 38 148 -74% 38
Canada 5 3 2 2 5 5 7 53 31 71% 53
Western Europe 1 1 1 0 3 2 2 15 9 62% 15

Source: China Customs Data

* Rolling 12-month total

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