Ence Reports Sales of Specialty Pulps Climb to 32% of Pulp Sales in First Half of 2025

Aug. 11, 2025 – Spanish pulp and paper producer Ence [on July 22] presented its results for the first half of the year, marked by falling pulp prices and uncertainty stemming from tariffs.

During this period, the company has continued to focus on its transformation strategy toward becoming a producer of higher-value-added specialty pulps, a substitute for long-fiber pulp, which will position it as one of the most competitive producers in this market. This is in addition to its commitment to non-conventional renewable energy, through new developments in biomethane and renewable industrial heat.

For its part, and during the second quarter of 2025, Ence has managed to reduce its average cost per ton of cellulose (cash cost) to 488 euros, which represents an improvement of 22 euros/ton compared to the previous quarter, thanks to the continuous improvement in operational efficiency and energy optimization initiatives.

Ence's Fluff Pulp to Replace Long-fiber Pulp

Specialty pulps continue to gain prominence within the company's commercial mix, already reaching 32% of total Pulp sales in the first half of the year, compared to 23% in the first half of 2024.

This development reflects Ence's firm commitment to higher value-added products and will be reinforced in the fourth quarter of the year with the start-up of the new fluff pulp production line for the absorbent hygiene products market. With this special type of pulp, Ence will be one of the most competitive producers in this market compared to long-fiber producers.

Financial Results

Ence recorded revenues of EUR 192 million in the second quarter, a 3% increase over the previous quarter. This figure was driven by higher sales volumes in both the Pulp business (with 243,000 tons, 12% more than the previous quarter, when Navia was shut down) and the Energy business (with 303 GWh, a 9% increase over the previous quarter), which helped mitigate a weak sales price environment.

Focused on the first half of 2025, the Group has completed two sales transactions with the accreditation of 191 million Energy Saving Certificates (CAEs) (equivalent to savings of 191 GWh) and 61 million CAEs (equivalent to savings of 61 GWh), respectively, with their transfer price, net of acquisition costs, of 30 million euros and 10 million euros, respectively.

In the first half of 2025, the company recorded net attributable profit of -6.9 million euros, impacted by the decline in pulp prices.

Recovery Expectations

The average raw short staple fiber price (BHKP) in Europe was $1,177 per ton between April and June (compared to a peak of $1,218/t reached in April) and, in July, stood at $1,060/t, below the industry's marginal production cost. The restocking process should drive a price recovery once tariff uncertainties are overcome.

SOURCE: Ence (Energía y Celulosa)

Metsä Board Launches Programme to Improve Profitability and Cash Flow

Aug. 5, 2025 - Metsä Board, part of Metsä Group, has experienced a prolonged period of unsatisfactory profitability and cash flow performance. Intensified competition and more cautious consumer behaviour have reduced demand for paperboard packaging. Additionally, high wood raw material costs and the weak development of the pulp market have negatively impacted the company’s performance and competitiveness.

In response to the changing market environment, the company is accelerating growth and strengthening its services in Europe by leveraging its strong market position, leading sustainability performance, and expertise in developing material-efficient, safe, and recyclable packaging solutions for customers. This development is further supported by the tightening requirements for packaging of the EU Packaging and Packaging Waste Regulation (PPWR).

The company’s objective is to maintain a strong market position in the U.S. and drive growth especially through existing customer relationships. Over the past ten years, Metsä Board’s growth has been strongly focused on the U.S. market. Increasing global uncertainty and import tariffs have together temporarily reduced Metsä Board’s paperboard deliveries to the United States. Due to growth-related uncertainties, new growth efforts are also being directed toward other markets.

Metsä Board’s Board of Directors [on July 31] decided to launch a cost savings and profitability improvement programme, targeting an annual EBITDA increase of EUR 200 million. The programme consists of cost savings (EUR 100 million) and profitability improvement (EUR 100 million). Implementation will begin immediately by initiating project planning and execution under a new management structure. Progress will be reported regularly.

"We must take immediate actions to improve our profitability and competitiveness,” said Esa Kaikkonen, CEO, Metsä Board. “Our cost structure must be adjusted to reflect current market conditions. Before launching the programme, we conducted a thorough analysis of our operating environment and our strengths. Our leading position in high-quality, fresh fibre-based packaging solutions, long-term customer relationships, and committed personnel form a strong foundation for profitability improvement."

The programme is expected to improve comparable EBITDA by EUR 100 million in 2026, with the majority of the impact in the second half of the year. The remaining impact is expected to be realised by the end of 2027. Additionally, the closure of the Tako mill and efficiency improvements at the Kyro mill are expected to contribute approximately EUR 30 million in annual EBITDA improvement starting from Q4 2025.

In addition to delivering cost savings, the programme sharpens commercial focus by redefining key customer segments and strategically aligning sales efforts to support profitable growth.

Product development will focus on meeting evolving regulatory requirements, particularly in the fast-growing food and foodservice packaging segments, healthcare, and other strongest growing brand segments. Supply chain efficiency will be improved by streamlining the product portfolio and reducing complexity.

To strengthen cash flow, Metsä Board aims to release at least EUR 150 million in working capital by the end of 2025. The company will conduct a critical review of ongoing investment pre-engineering projects and its ERP programme and provide an update on them latest in its interim report for January–September 2025. In addition, Metsä Board will update its strategy and renew its financial targets – currently ROCE >12% and net debt to EBITDA < 2.5 – by the end of first quarter of 2026.

Metsä Board is a producer of lightweight and high-quality folding boxboards, food service boards and white kraftliners.

SOURCE: Metsä Board

Canfor Pulp Reports Second Quarter 2025 Results

Aug. 1, 2025 - Canfor Pulp Products Inc. on July 31 reported its second quarter of 2025 results. The company reported an operating loss of $5.3 million for the second quarter of 2025, compared to operating income of $10.8 million for the first quarter of 2025. After adjusting for a $2.9 million inventory write-down in the current period, the company's operating loss was $2.4 million for the second quarter of 2025. These results were largely driven by a decline in both the company's average Northern Bleached Softwood Kraft ("NBSK") pulp and paper unit sales realizations in the current quarter and, to a lesser extent, an uplift in pulp unit manufacturing costs.

Commenting on the second quarter performance, CPPI's President and Chief Executive Officer, Stephen Mackie, remarked, "Our results for the second quarter of 2025 were strongly influenced by persistent global economic uncertainty, significantly impacting global pulp and paper market fundamentals. We anticipate these market pressures to continue throughout the third quarter. We are closely monitoring these external factors but continue to remain focused on optimizing areas within our control, including improving safety, reliability, productivity and cost structure."

Second Quarter Highlights

Global softwood pulp markets experienced downward pressure throughout the second quarter of 2025, primarily driven by weak demand from China, largely tied to the impact of new trade policies between China and the US, as well as general global economic uncertainty. As a result, US-dollar NBSK list prices to China, the world's largest pulp consumer, started the quarter at a high of US$798 per tonne, before declining steadily throughout the period, ending June at US$690 per tonne.

For the current quarter overall, US-dollar NBSK pulp list prices to China averaged US$734 per tonne, down US$59 per tonne, or 7%, from the prior quarter. As a result of weak demand, global softwood pulp producer inventories climbed significantly through the second quarter of 2025 to well above the balanced range, ending May at 46 days of supply, an increase of 8 days compared to March 2025. Market conditions are generally considered balanced when inventories are in the 32-43 days of supply range.

Canfor Pulp's average NBSK pulp unit sales realizations experienced a modest decline compared to the previous quarter, primarily reflecting US-dollar NBSK pricing pressure in China combined with a 3 cent, or 4%, stronger Canadian dollar. These factors, however, were moderated in the current period by an uptick in US-dollar pricing to other global regions, coupled with a favourable lag in the timing of shipments versus orders. As a result, the full impact of weak US-dollar China list prices towards the end of the second quarter will not be evident in the Company's average NBSK pulp unit sales realizations until the third quarter of 2025.

Pulp production was 102,000 tonnes for the second quarter of 2025, down 2,000 tonnes, or 2%, from the first quarter of 2025, primarily due to minor operational disruptions in the current period.

Operating income in the company's paper segment was $1.5 million, compared to $5.4 million in the previous quarter, largely driven by a slight decline in North American US-dollar paper pricing combined with the stronger Canadian dollar in the current period.

Outlook

Looking forward, global softwood kraft pulp market conditions are anticipated to remain weak throughout the third quarter of 2025 as purchasing activity, particularly from China, is forecast to be soft through the traditionally slower summer period, despite the announcement of market curtailments from some Nordic pulp producers. As a result, global pulp producer inventories are forecast to remain well above the balanced range through the third quarter of 2025.

The company continues to actively monitor developments in the trade relationship between Canada and the United States. In the event that tariffs are imposed on US pulp and paper shipments, the Company has mitigation strategies intended to largely offset potential impacts.

The subdued demand for bleached kraft paper in North America observed at the end of the first quarter and throughout the second quarter is anticipated to persist into the third quarter of 2025. This outlook is principally attributable to the ongoing uncertainties related to Canada-US trade relations, as well as general global economic pressures.

A minor scheduled maintenance outage will take place during the third quarter of 2025 at Canfor Pulp's Intercontinental NBSK pulp mill and at its paper machine. This maintenance outage is projected to reduce both NBSK market pulp production and paper production by 2,000 tonnes each.

Canfor Pulp Products Inc. is a leading global supplier of pulp and paper products with operations in the northern interior of British Columbia ("BC"). Canfor Pulp operates two mills in Prince George, BC with a total capacity of 780,000 tonnes of Premium Reinforcing Northern Bleached Softwood Kraft ("NBSK") pulp and 140,000 tonnes of kraft paper.

SOURCE: Canfor Pulp Products Inc.

Metsä Group Reports Half-Year and Second Quarter 2025 Operating Results

Aug. 4, 2025 - Metsä Group on July 31 reported half-year and second quarter 2025 operating results.

Events During the Second Quarter of 2025

The average sales prices of Metsä Group's softwood market pulp were 5% higher in Europe and 6% lower in China than in the previous quarter.

Demand for market pulp was weak in both Europe and China. Metsä Fibre has curtailed its pulp production at the Joutseno mill for the time being.

Metsä Group's paperboard delivery volumes de-creased slightly from the previous quarter. Average paperboard prices remained stable. The uncertainty caused by the US import duties in particular has negatively affected customers' purchasing behaviour.

To improve profitability and competitiveness, the Tako board mill was closed permanently. The mill's production ended in June 2025, and production was transferred to Kyro board mill.

Change negotiations at the Kreuzau tissue paper mill were concluded.

Jussi Vanhanen assumed his post as President and CEO of Metsä Group on 1 July 2025.

Result Guidance July-September 2025

In July-September 2025, Metsä Group's comparable operating result is expected to be weaker than in April-June 2025.

Events After the Review Period

Due to prolonged weak profitability and the uncertain market outlook, Metsä Group is to initiate the planning of a significant cost savings and profit improvement programme. The aim of the programme is to achieve annual cost savings of approximately EUR 300 million, which are expected to be implemented gradually from 2026.

The planning of the cost savings and profit improvement programme is to be completed by the end of the current quarter. According to the plans, the programme will focus on procurement and logistics costs, the wood supply chain's optimisation from the forest to production units, and the reduction of fixed costs. The programme does not include permanent or temporary closures of production units.

In addition to the cost savings programme, each Metsä Group's business area will aim to improve its result by updating and sharpening its commercial strategy.

CEO Comments

President and CEO Jussi Vanhanen said, "Metsä Group's result in the second quarter of 2025 was clearly negative. This was mainly due to the increased uncertainty in world trade. The US administration first raised tariffs on Chinese imports and later on nearly all other countries' imports. Metsä Group's customers reacted as any rational company would: cautiously. In the short term, uncertainty about the level of tariffs was no less problematic than the tariffs themselves. In addition, consumer confidence weakened in both Europe and the US in the first half of the year.

"In the second quarter, Metsä Group's pulp deliveries declined by more than 30% from the first quarter. Our pulp customers in Asia especially were concerned about their sales and profitability development and significantly reduced their sales volumes at the beginning of the quarter. This led to a decrease in prices. Demand in Asia recovered slightly towards the end of the quarter. In Europe, demand decreased to some extent in most end-use sectors due to increasing economic uncertainty.

"Our US paperboard customers reduced their order volumes due to the uncertain tariff situation. We have avoided losing customers permanently so far, but prolonged uncertainty increases the risks. In Europe, demand remained stable.

"Higher costs — especially those of wood raw material — also weakened the profitability of all Metsä Group business operations in the second quarter. The purchase prices of Metsä Group's wood took a downward turn during the quarter but remained at a historically high level.

"In recent years, Metsä Group's operations have focused on growing the business, which is important for the company and its owner-members in the long term. In line with our ownership strategy, all our production is in Northern Europe, but a third of our sales go outside Europe. Metsä Group is therefore susceptible to changes in global trade flows.

"After the review period, the United States and the EU reached a preliminary agreement under which the US will impose a 15% tariff on almost all imports from Europe, including forest industry products. The competitiveness of Nordic forest industry on the US market will depend both on local competition and on the tariff agreements the US makes with other countries. At this stage, it seems that our competitiveness is weakening compared to both American and Canadian operators. The regionalisation of supply chains initiated by the pandemic will probably continue. Our significant growth investments in the tissue paper business and wood products industry will be completed during the next year. They are based on demand in Europe.

"Metsä Group's equity ratio remains strong, and we must ensure that it continues to do so. Our current profitability level is unsustainable and does not enable new growth investments. We cannot just wait for a potential improvement in economic cycles but must instead focus on improving profitability. We are therefore initiating the planning of launching a cost savings and profit improvement programme, aiming for cost savings of at least EUR 300 million by the end of 2026.

"We have considerable savings opportunities in procurement and logistics, fixed costs, and the optimisation of wood consumption. This calls for increasingly close internal cooperation throughout the organisation. More detailed planning of cost savings projects is underway and will be completed by the end of the third quarter.

"Over its history, Metsä Group has faced various challenges and change and development needs, to which our employees have always responded with persistent effort. We will also address the current profitability challenge through determined cooperation."

Near-Term Outlook

The demand for wood will particularly concern thinning sites suitable for summer harvesting and crown wood in terms of energy wood. Demand for forest management services is expected to remain strong.

In much of Europe, the outlook for construction remains muted, and this is reflected in the weak demand for spruce plywood in particular. However, demand for Kerto LVL products remains stable. The overall demand for birch plywood is expected to remain stable, but industrial customers' demand for speciality plywood products is expected to pick up.

In the UK, demand for the upgrading business is expected to remain stable in the DIY segment but weaker than normal in the wholesale customer segment and new construction in the coming months.

Overall demand for softwood market pulp is expected to improve slightly but remain lower than normal as uncertainty about global economic development and tariff negotiations related to trade policy undermine overall demand for paper and paperboard products. Demand for sawn timber is expected to decline slightly during the third quarter on a seasonal basis.

The annual maintenance shutdown of the Äänekoski bioproduct mill will take place in the third quarter.

Consumers' cautious purchase behaviour and the supply of fresh fibre paperboards increasing faster than demand, especially in the EMEA region, continue to affect paperboard demand. Tensions in global trade policy, especially the import duties imposed by the US, increase uncertainty and make it difficult to predict the trend in paperboard sales. In July-September 2025, Metsä Board's overall paperboard deliveries are expected to remain at largely the same level as in April-June.

Demand for tissue and greaseproof papers is expected to remain stable.

Metsä Group has its roots in the Finnish forests: our parent company Metsäliitto Cooperative is owned by over 90,000 forest owners. The Group focuses on wood supply and forest services, wood products, pulp, paperboards, and tissue and greaseproof papers.

SOURCE: Metsä Group