4 From the General Manager Danny Knoesen After recently participating in the annual Woodfibre and Biomass conference in Singapore, it is appropriate to share with our stakeholders the current views with our markets. As always, the international wood chip trade is linked directly to the fortunes of the global pulp and paper industry, Asian pulp prices and, as a result, the general state of the Chinese economy. Hardwood pulp prices have generally been depressed, sitting at around $550 per tonne in China, well down form peaks of $860 in 2022. Paper consumption, especially printing and writing paper continues to decline a little each year. Coupled with increasing shipping costs as shipping lines must meet challenging carbon emission targets, it’s been a difficult 18 months or so for wood chipping companies in general. The anecdotal evidence from our Australian and Chilean competitors outlines how tough they are finding it, and October this year has seen the well-known Brazilian woodchip supplier TANAC cease all its wood chipping operations and exports. Perhaps we chose the right time to have to recover from our fire in Richards Bay. Under these circumstances, NCT has been told by several customers that the importance of FSC certification remains as important as ever, and there are expectations that we are able to increase our offering in this regard. Regardless of the above, NCT has secured a full order book for both Durban and Richards Bay for 2025, as our loyal customers welcome our return to some normality and have quickly secured their required volumes. We have also seen that much interest from India as a buyer has returned, and we are looking to see how best to leverage this against some of the capacity restraints we face. Europe in general is likely to offer little in terms of market opportunity for 2025, as they are faced with an abundance of their own oversupply on top of surplus eucalyptus from Brazilian ports too. Despite a full order book, it does seem that our dollar pricing will remain under sustained pressure into 2025. With Trump winning the American elections, many are now poised to see what happens from Trade Wars 2.0 and whether further tariffs on Chinese commodities and goods into the USA will negatively influence the fragile Chinese economy. Locally Sappi continues to feature as our main customer, and the endeavours we have collaborated on to achieve EUDR compliance is worthy of mention as a glue that hopefully cements our relationship. We have seen PG Bison in the north taking a modest but regular flow of NCT’s member timber and we are expecting further northern markets to open in 2025. Regardless, we continue to be mindful of the need to find alternate gum markets for our members, especially in the south. We expect 2025 to be a year of consolidation for NCT, albeit with a full order book, and a return to full production capacity to support our full member base.
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