Tenth Annual
Latin American Conference

August 17-19, 2015 | Grand Hyatt | São Paulo, Brazil
The Latin American Conference will take place next month and there are many opportunities and challenges arising in the industry.

In a recent development, RISI is reporting that APRIL's larger BHK pulp line in Shandong Province, China, is going to take unscheduled downtime from now through perhaps October. The smaller BHK at Rizhao is already down, so the total capacity being taken out of the market is over 1.8 million tonnes on an annual basis. That is more than 5% of the overall BHK market.

The cause of the downtime is a drought in Shandong Province that has left the city of Rizhao with little water. The length of the downtime will depend on the water supply going forward. A water diversion project is underway and is expected to be finished in October, at which point the pulp lines at Rizhao should come back into operation. A restart before that is, of course, is weather dependent.

Join us at the conference to learn more about this topic and how it will affect you:
    Rizhao is by far the largest Chinese supplier of BHK to the Chinese market. Overall, it accounts for about 5% of world market pulp capacity.
    With Rizhao out of the market, many Chinese buyers will have a more difficult time getting pulp and the effective world BHK operating rate (shipments/capacity) will rise by 5% because that much capacity has temporarily left the market.
    Taking out 5% of capacity is a major development because there is a thin margin between “loose” market conditions (weak prices) and “tight” market conditions (rising prices).
    Buyers who can’t get tonnage from Rizhao will have to look for other sources. This will primarily affect Latin American producers in Brazil, Chile, and Uruguay.
        BHK prices in China will be higher than they otherwise would have been and Latin American BEK produces will sell additional volume, compared to what they expected, for as long as Rizhao’s pulp operations are down.

RISI  -  USA -  30 julio 2015