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Market pulp prices experienced a steep growth during 2017 and 2018, reaching unprecedented levels for both hard and softwood pulp. Profitability of market pulp producers has risen steeply leading to an increase in company valuations. Projections continue to be bullish but commodity markets are by definition highly cyclical. In general markets remain rather fragmented despite some recent consolidation. New capacity has become ever bigger decreasing cash costs tremendously but increasing financing risks which has led to discontinuation or delay of some projects. High pulp prices currently impact non-integrated companies and whole segments of the industry where integration levels are low. During this time companies with higher pulp integration levels have been able to retain profitability of their products while being able to manage market volatility.

StepChange supports companies to reduce their exposure to cyclicality, reduce production costs and streamline their raw material supply chains.