Global Pulp Market Enters Risk Zone and Suzano Reveals Unprecedented Pressure on Prices

Written by Caio Aviz

Published on 08/11/2025 at 10:23

Fábrica de celulose com rolos prontos para envio, ilustrando o cenário de pressão sobre custos e produção destacado pela Suzano.

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Global Price Scenario

Suzano S.A. released its third quarter results in November 2025.
Additionally, the company stated that the global pulp market is facing a critical scenario.
International prices have remained below US$ 600 per ton for 13 months.
Consequently, the company assesses that current values are completely unsustainable.
Therefore, Suzano believes supply cuts are inevitable in the short term.
This view was reinforced by the Brazil stock guide.

Pressure on Producers

Still, the producer estimates that 15% of the global short fiber capacity operates below cash cost.
Therefore, factories in Europe face elevated risks.
As a result, the market presents a relevant structural imbalance.
The situation jeopardizes the survival of less efficient producers.

Leadership Statements

Furthermore, Leonardo Grimaldi, Director of Pulp at Suzano, stated that the sector has been bleeding for months.
Later, he highlighted that up to 25% of European capacity has become economically unviable.
Simultaneously, he explained that wood chips have become more expensive in China.
Prices currently range between US$ 25 and US$ 40 per ton.
This increase amplifies cost pressure.
This also accelerates the shutdown of less competitive units.
However, the recovery of Chinese consumption is occurring gradually.
Still, it allows for adjustments of up to US$ 20 per ton in the coming months.

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Supply Adjustments

Meanwhile, Suzano projects significant supply adjustments over the next few quarters.
The global increase in wood costs pressures operations.
The limitations of recycled fibers in China also influence the scenario.
Low profitability in Europe and North America exacerbates the situation.

Cost Evolution

Concurrently, the company reported a 4% decrease in cash cost in the third quarter.
Cost reached R$ 801 per ton during the period.
Additionally, the value fell below R$ 800 in the fourth quarter of 2025.
This value is among the lowest in recent years.
Consequently, the efficiency policy gained strength.
Cheaper energy contributed to the reduction.
More efficient logistics also aided the company.
Lower use of chemical inputs reinforced performance.

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Impact of the Contract with Eldorado

Additionally, the new wood contract with Eldorado Brazil comes into effect in 2026.
The agreement is expected to reduce wood consumption by 4% per ton.
This reduction will support structurally low costs until 2027.

Financial Strategy

After that, CEO Beto Abreu emphasized a focus on efficiency and productivity.
The company is not betting on a new price cycle.
Despite this, leverage rose to 3.3 times EBITDA.
The increase reflects depressed international quotes.
However, net debt remained stable.
Free cash flow was positive in the quarter.

Expenses and Bond Issuance

The company reported about R$ 1 billion in extraordinary expenses.
These expenses include operations with Eldorado.
They also encompass early bond redemptions.
Still, cash generation remained positive.

Suzano issued US$ 1 billion in ten-year bonds.
This bond features the lowest spread in the company’s history.
The average debt term rose to 80 months.
The annual cost was 5%.
The currency hedge could generate R$ 2.5 billion by 2026.

Packaging and Expansion

Finally, the packaging unit reported EBITDA of R$ 542 million.
The figure represents an 11% increase compared to the previous quarter.
The Pine Bluff factory in the United States became profitable for the first time.
The company plans to expand food papers in the country.
Improvements at the Mucuri unit are expected to strengthen margins in 2026.

Next Steps

Finally, Suzano will present a strategic update at the Investor Day on December 11, 2025.
The company will detail cost and leverage targets.
It will also showcase the integration plan with Kimberly-Clark.

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Global Pulp Market Enters Risk Zone and Suzano Reveals Unprecedented Pressure on Prices

Global Price Scenario

Pressure on Producers

Leadership Statements

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

Supply Adjustments

Cost Evolution

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Financial Strategy

Expenses and Bond Issuance

Packaging and Expansion

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Global Pulp Market Enters Risk Zone and Suzano Reveals Unprecedented Pressure on Prices

Global Price Scenario

Pressure on Producers

Leadership Statements

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

Supply Adjustments

Cost Evolution

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Financial Strategy

Expenses and Bond Issuance

Packaging and Expansion

Next Steps

For 45 years, Spain and Morocco have been trying to connect Europe to Africa through a project of just 14 kilometers in the Strait of Gibraltar, and an active tectonic fault on the seabed continues to make the project nearly impossible.

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Where there was only sand and wind at 40 degrees, China built a megacity of 500,000 inhabitants with farms, wineries, and universities in the middle of the desert using melted glacier water from hundreds of kilometers away.

Rain gains strength in April, potentially exceeding 150 mm, placing the North, Northeast, and the coasts of the South and Southeast at the center of the heaviest forecast of the week.

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