2 As the year gains momentum, we take stock of how 2024 ended and how our expectations for the new year are panning out. Report back from the Chinese pulp market shows no drastic change in the last couple of months, there is a marginal increase in the Bleached Hardwood Kraft (BHK) pricing of merely single digits, and the price stubbornly remains below $570. What is encouraging is that the bottom has been reached, and South American pup manufacturers are starting to put increases firmly on the table going forward. Paper margins in China, especially for coated and uncoated woodfree products, remain below five-year averages but also show signs of bottoming out. The Chinese New Year is past now and the next two months will reveal much about how the market is going to play out for the remainder of the year. China, in many ways, is conflicted between new capacity coming online and this causing arguably an overcapacity. In this situation only the larger, more modern mills can hit their required margins. Despite this China is really the only market likely to show growth over the next five years. The attached pie graph shows their dominance as a buyer even in a tough 2024 year for them. Japan woodchip demand is in slight decline, and we are in a fortunate position as we continue to nurture our long-term relationships with key players to the point where our volumes remain steady as other suppliers from far away countries (Brazil, Chile, Australia) show some attrition. India remains a dark horse, unpredictable and probably not the basket in which to place too many eggs. However, as a country, they From the General Manager Danny Knoesen will exceed China’s population and become the world’s most populous nation. We are seeing a number of inquiries from some players, and we have a few lines in the water. Watch this space. Overall, South Africa’s biggest threat continues to come from Vietnam, who for the 2024 year, managed to supply 62% of the entire Asian hardwood chip market. In the table, as one casts an eye of the supply countries, it must be acknowledged that South Africa’s performance was drastically impacted by the fire over 2023 and 2024, and we expect to move strongly into 4th spot during 2025. Regardless, we continue to produce to a full order book for 2025. Our Richards Bay complex repairs will continue during the year, with the eastern stockpile being handed back to production in August, and the western side in December. We continue to work around these activities and are running at 100% capacity for wattle and 80% for gum. Last, we thank our members for your ongoing support and having faith in your organisation as we pull ourselves into 2025. We are in a healthy situation as we begin our post-fire consolidation.
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