World BHK Pulp Market Outlook: Supply-Demand Balance Supports High Prices

Global demand for BHK pulp grew at a CAGR of 2 percent from 2010 to 2017 and is estimated to total 65 million tonnes in 2017. According to Rabobank forecasts, consumption will grow by 1.2 million tonnes in 2018, which corresponds with a growth of 1.8 percent for the year. However, consumption trends in developed and emerging markets continue to move in opposite directions.

eucalyptus forest in Brazil


  • Global bleached hardwood kraft (BHK) pulp prices have been rising steadily in 2017 as the expected strong supply growth has been hindered by a combination of plant downtimes and low capacity utilisation at new lines. 
  • Rabobank expects global supply to rebound in 1H 2018 with strong production growth from Brazil. However, given the size of the 2017 deficit and steady demand growth in China, the global supply-demand balance is expected to only amount to a small surplus in 2018. 
  • With no other large BHK pulp plants entering production in 2018-2019, supply growth will hinge on rising utilisation rates at existing lines. 
  • If demand expectations from China are confirmed in 2018, BHK prices could move higher still in 2H 2018 after a moderate decline in 1H 2018, with buyers wanting to guarantee volume requirements and a limited scope for additional supply growth in key export regions.