Cellulose begins download price

BTG Pactual reiterated once again that Suzano's actions are his favorites in the paper and pulp sector, it being understood that the values of the roles are still undervalued and investors have not yet seen the benefits of the merger with Fibria, as the synergies and business consolidation. The assessment was performed after the company announced a reduction in prices for the markets in Europe and China. With that, the Suzano shares have 2.21% drop the R $44.59. The Bank believes that there are downside risks to the investment thesis, but see the Suzano negotiating with 4, 2 x 19 and 18% EBITDA of FCF. On a monthly basis, the company would still be generating a FCF yield of approximately 14%, which, in their view is a good omen for the call of deleveraging. In a report sent to clients, the Bank highlights that an impasse between suppliers of brazilian pulp and Indonesia and Chinese buyers. Although the Chinese have pressed aggressively for discounts (in a coordinated fashion), the sellers simply did not believe that the fundamentals ensure discounts and maintain prices. The result was a highly illiquid market and an aggressive stock (from the perspective of the supplier), leading to an unsustainable dynamic. As of this morning, the Suzano confirmed that is finally subsiding, reducing prices in US $40/t for the Chinese and European markets. The new prices are also well above the current spot price (10% above the spot >). The BTG considers that recent data indicate that prices actually reached the bottom and now we should see the prices going up again to potentially $ $700/t while the fundamentals of China remain pressured and there are still risks, pricing analysts believe that the strategy for a common ground is reasonable.