SUZ - Suzano: Net Prices Should Be Stable For Next Quarter Cerrado Soon Finished

2024-02-13 15:17:33 ET

Summary

• Suzano S.A. is maintaining price levels despite the downturn in pulp prices, thanks (we think) to the nearing completion of the Cerrado project.
• The completion of the Cerrado project should have a substantial impact on overall volumes and increase profitability, given current pulp prices hold.
• Suzano's Q4 should be relatively flat sequentially. All eyes should be on Cerrado, as the end of that CAPEX will restore FCFs and also resume deleveraging.

Suzano S.A. ( SUZ ) is successfully holding progressed levels despite the recent downturn in pulp prices that began to be reflected in the previous quarters. We think it's because the Cerrado project is approaching its end. Cerrado will have a substantial impact on overall volumes, we remember disclosure about a 25% increase. Moreover, while Suzano is large, its production and the increases from Cerrado are only a couple of percent of the global pulp production, so the impact on prices should not be too fierce from introducing that supply....

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