The global pulp picture: oversupply with regional variation
The wood pulp market in mid-2026 comes down to one number: global producer inventories reached 42 days of supply in April, according to Fastmarkets data. Producer stocks rose by 158,000 tonnes in the month, and the trend has continued into mid-year. The Pulp and Paper Products Council (PPPC) reports that softwood mill inventories started 2026 at 50 days — a five-year high — before settling to 46 days, still within what they call "statistical normal" range.
Within this broad oversupply, the market is distinctly regional. China, the largest consumer, is actively destocking. Europe is steadying after a period of weakness. North America is cutting list prices to move volume. And within each region, the spread between Northern Bleached Softwood Kraft (NBSK) and Bleached Hardwood Kraft Pulp (BHKP) is widening.
China: destocking continues, demand soft
Chinese port pulp inventories have fallen for five consecutive weeks, reaching 2.257 million tonnes as of July 16 — down 28,000 tonnes week-over-week, according to SunSirs data. Five straight weeks of destocking, but inventories are still elevated in absolute terms, keeping buyers cautious.
The Shanghai Futures Exchange (SHFE) pulp futures market tells a story of weak conviction. The main contract closed at 4,840 RMB/t in early July with active trading, but by mid-July had drifted to 4,728 RMB/t. SunSirs described the market as "first fell, then rose" with "no decisive breakout" — speculative volatility rather than structural tightness. The futures curve is flat to slightly backwardated, offering no incentive to hold inventory.
Downstream demand in China is seasonally weak. Domestic white paperboard operating rates are slightly reduced as mills enter the off-season. Packaging demand is weak, with mills buying only to maintain safety stocks. Tissue demand is "relatively stable" according to Golden Paper's April global pulp review, but uncoated paper and paperboard show weak recovery.
The PPPC forecasts full-year 2026 global softwood demand to fall 1%, with Chinese softwood pulp demand expected to decline more than 4% after a near 9% increase in 2025. The rationale: inventories are unwinding, consumption stays weak, and softwood-to-hardwood substitution continues, partly offset by a narrowing softwood-hardwood price gap.
Europe: stable but fragile
European NBSK prices have firmed modestly. Mercer's Q1 2026 results show European NBSK list prices averaging $1,618/t, up roughly $120 from Q4 2025, driven by supply constraints including producer downtime and mill closures. Spot prices started the year in the 1.14-1.15 EUR/kg DAP range and have since stabilized.
The hardwood side tells a different story. German BHKP prices were down about 1.5% quarter-over-quarter in Q1 2026, with "weak" free-delivered Hamburg prices and cautious demand from the tissue and packaging sectors. The Price-Watch July 12 report notes an "unusual regional divide" emerging: BHKP prices in China face renewed downward pressure, while Germany and the US see stabilizing demand with selective restocking. But global oversupply caps any upside.
European mills face headwinds from elevated energy costs and logistics expenses. Buyers are resisting price increases, timing purchases closely to usage rather than building inventory. The continent's pulp and paper sector is described by multiple reporting services as "demand-soft" with above-average port inventories.
North America: list prices under pressure
The North American market has been the weakest region. Fastmarkets reported US NBSK list prices were cut by $20 to $1,570/t in May, citing oversupply and rising global producer inventories. Mercer's Q1 2026 results confirm the pressure: average NBSK sales realization was $696 per air-dried metric tonne, down roughly 11% year-over-year. North American list prices averaged $1,563/t in Q1, flat quarter-over-quarter, while Chinese net realizations sat at roughly $685/t.
The US BHKP market has been on a similar trajectory. East Coast prices fell 1.1% in Q1 2026 after dropping 5.3% in Q4 2025. Demand is described as "stable but cautious" with inventories tightly managed. Buyers are resistant to any price increases, and many are substituting toward lower-cost hardwood'furnish where technical specifications allow.
Suzano and the hardwood supply wave
Brazilian pulp giant Suzano remains a dominant force in global hardwood markets. The company's recently expanded capacity — including the Cerrado project, which began ramping in 2024 — has added significant BHKP volume to global markets. Suzano reported Q1 2026 pulp production of [x] million tonnes, with sales volumes reflecting the persistent pressure on the hardwood side. Brazilian hardwood pulp exports to China compete directly with Asian hardwood grades on price, and the additional tonnage has kept BHKP prices subdued globally.
Klabin, the other Brazilian integrated pulp and paper producer, completed its Monte Alegre expansion in December 2025, adding 150,000 tonnes of carbon-neutral kraft pulp capacity. The additional tonnage from Latin America means that even as demand fundamentals remain supportive for packaging grades, the pulp market will struggle to tighten meaningfully in 2026.
Analyst views: a stabilization year
Bull case
The bull case rests on destocking running its course. Chinese port inventories have fallen for five weeks straight — if this trend accelerates through Q3, restocking could drive a sharp price recovery. Tissue demand remains the fastest-growing end-use segment globally at roughly 5.9% CAGR through 2031. A narrowing softwood-hardwood price gap could also reduce substitution away from softwood grades, supporting NBSK prices.
Bear case
Global producer inventories at 42 days is a troubling signal. The additional Latin American capacity from Suzano and Klabin, combined with weak graphic paper demand and cautious tissue buyers, points to a market that could stay oversupplied through year-end. The PPPC forecast of declining Chinese softwood demand adds further weight. US list prices have already been cut once; further cuts are plausible if inventories continue building.
Base case
Most sector reports characterize 2026 as a "stabilization year" after the price declines of 2025. Packaging and tissue will absorb most available volume. Graphic paper demand continues its structural decline. Global softwood demand is expected to contract 1%. The most likely path: NBSK prices hold near current levels with modest downside risk, BHKP prices remain subdued by ample hardwood supply, and the market waits for demand recovery in 2027.
For buyers of NBSK and BHKP pulp, the mid-2026 environment offers a mixed picture depending on region and grade. NBSK buyers in North America should expect further list price pressure given 42-day global inventories and the $20/t cut already implemented. The strategy should favor shorter-term contracts and spot purchases — there is no supply tightness to justify locking in volume premiums. Chinese NBSK buyers benefit from destocking dynamics that favor buyers; port inventories remain high enough to keep mills competing for sales. European buyers face the firmest market: supply constraints from downtime and closures have supported NBSK list prices near $1,618/t. Hedge by increasing hardwood substitution where technically feasible — the NBSK-BHKP spread has widened. For BHKP buyers: the global market is awash in hardwood pulp from expanded Latin American capacity. The additional tonnage from Suzano's Cerrado project and Klabin's Monte Alegre expansion ensures competitive pricing, especially for delivery to Asia. Buyers should resist any Q3 price increase proposals — the fundamentals do not support them.