After a period of supply-demand adjustment and price bottoming out, the international pulp market is now entering a crucial window for supply-demand rebalancing.
The research institute of Rabobank, which focuses on food and agriculture-related enterprises, clearly pointed out in its latest edition of the "2026 Agricultural Information Report" released in August that, due to global active production cuts leading to supply tightening, and China's continuous rigid demand for imported raw short-fiber pulp, the international pulp prices are expected to show a moderate and gradual recovery trend in the second half of 2026.
Although the global economic growth slowdown has inhibited a significant unilateral price surge, driven by the joint effect of production suspension and inventory reduction, supply from Brazil's low-cost eucalyptus broadleaf pulp is demonstrating strong cyclical resilience and competitive advantages.
Global active production cuts exceed 2.2 million tons, and the short-fiber supply-demand pattern is accelerating recovery
The report, citing authoritative statistics from Fastmarkets, pointed out that since 2026, the contraction in the supply side of the global short-fiber pulp market has exceeded previous expectations. Due to the permanent closure of some high-cost factories, equipment maintenance, production line active re-orientation, and temporary production restrictions in multiple regions, the actual supply of short-fiber pulp withdrawn from the global market has exceeded 2.2 million tons.
This deep supply-side adjustment has directly accelerated the inventory reduction process in major consumer markets, laying the foundation for the phased bottoming and stabilization of spot and long-term contract prices.
Although in the third quarter, due to the influence of the traditional summer off-season, the prices of some pulp grades still face certain downward game pressure, the overall contradiction of supply surplus has been systematically alleviated. The future price rebound slope and persistence will be highly dependent on the degree of coordinated self-discipline of global core pulp producers, the replenishment rhythm of downstream paper manufacturers, and the consumption speed of port inventories.
The fundamentals of short-fiber are better than those of long-fiber, and the cost gap catalyzes formula substitution
In the sub-segment of fiber types, the trends of bleached broadleaf pulp (BHKP/BEK) and bleached coniferous pulp (NBSK) show a clear differentiation:
Short-fiber (broadleaf pulp) has a more positive outlook: mainly using eucalyptus as raw material, broadleaf pulp is widely used in household hygiene paper, mid-to-high-end packaging materials, special paper, and cultural paper. Thanks to the unique tree growth cycle of the Brazilian region, extremely high unit forest yield, and the scale effect of large forest-pulp integrated exporters, South American broadleaf pulp has built a profound barrier in the comprehensive cost at the port, and the supply fundamentals have been significantly restored;
Long-fiber (coniferous pulp) is facing high costs and high inventory pressure: Northern Hemisphere long-fiber manufacturers are suffering from the expensive log harvesting costs in Europe and North America, strict environmental and energy expenditures, and the heavy drag of local structural demand weakness, with overall profit margins experiencing significant compression;
The fiber substitution effect is accelerating: Although long-fiber has natural physical advantages in tensile strength and tear strength, short-fiber has advantages in softness, uniformity, smoothness, and printing adaptability. However, in the context of the cost gap remaining at a high level, downstream paper manufacturers are improving the proportion of short-fiber blending through process improvements within the technical allowable formula range, further consolidating the consumption base of broadleaf pulp.
China's demand for short-fiber is stable, and hygiene paper and felt pulp lead consumption growth
As the world's largest pulp consumer and the core destination of Brazilian pulp, China's purchasing behavior remains the decisive force in the evolution of global price centers.
Although the domestic economy has entered a high-quality medium-speed growth stage and the construction of large paper enterprises' forest-pulp-paper integrated bases has to some extent improved self-sufficiency, China's reliance on high-quality imported raw short-fiber has not fundamentally changed. Affected by high domestic costs of wood chips procurement, fluctuating long-distance logistics freight rates, and climatic factors, importing Brazilian eucalyptus pulp still has outstanding cost-effectiveness and competitiveness.
From the perspective of the terminal consumption structure, the two major categories of hygiene paper and fluff pulp show the strongest consumption resilience in the remaining time of 2026:
Hygiene paper: With the advancement of urbanization in emerging markets, the increase in per capita disposable income, and the strengthening of public health awareness, the demand for disposable facial tissues, wet wipes, and high-end hygiene paper remains rigidly expanding;
Fluff Pulp (Fluff Pulp): Along with the intensification of global population aging and the penetration rate of adult incontinence products, coupled with the quality upgrade of maternal and infant hygiene care products, fluff pulp has become one of the most certain growth segments in global fiber consumption.
Brazilian giants have strengthened cash flow management, and the domestic demand for packaging paper has steadily increased by 3%.
In terms of supply-side strategies, Brazilian paper industry giants such as Xuanzan Eno, Klabin, and Eldorado are adopting highly prudent and stable financial discipline.
At present, the major giants are prioritizing the release of free cash flow, reducing debt leverage, and improving the investment returns of built-up heavy assets projects, and maintaining a high degree of restraint in announcing new super-large greenfield investment projects. This rational capital expenditure rhythm effectively prevents the disorderly influx of new production capacity into the market, providing a solid support for the rational return of global pulp prices.
Although Arauco has planned long-term expansion projects in the state of Mato Grosso do Sul and CMPC has planned projects in the state of Rio Grande do Sul, due to the long cultivation and infrastructure construction cycles of large pulpwood projects, they will not have a substantive supply impact on the global spot market in the short term.
Meanwhile, the domestic packaging paper market in Brazil shows good vitality. Driven by the vigorous development of e-commerce logistics, the demand for food and beverage delivery, and the trend of "replacing plastic with paper", the Netherlands Bank expects that the domestic paper packaging sales in Brazil will achieve a stable growth of nearly 3% in 2026.
Taking climate risk disturbances into account, prices have entered a rational and moderate recovery track.
The report also specifically reminds that potential climate anomalies and the intensification of El Niño phenomenon in the second half of 2026 are external risks that the forestry and pulp sectors must be vigilant about. Extreme drought in some regions may inhibit the growth rate of forest trees and increase forest fire risks, while local heavy rainfall and floods may damage the internal road systems in forest areas, delay logging, and disrupt the supply rhythm of wood raw materials to factories, thereby pushing up the comprehensive operating costs of forest land.
Overall, the Dutch Bank's benchmark scenario is that the global pulp market will undergo a gradual and moderate order repair, rather than a blind and retaliatory surge. Under the combined force of continuous supply-side clearance, blocked high-cost production capacity, and the support of emerging consumer demand needs, the global pulp industry is gradually emerging from the trough of oversupply in supply and demand, relying on healthier inventory levels towards a healthy rebalancing.
