Mercer International's Q1 2025: Key Contradictions on Fiber Costs, Currency Fluctuations, and Market Dynamics

Fiber cost inflation in Germany, European pulp costs, impacts of economic uncertainty on market dynamics, currency fluctuations, price stability in key markets, and China market dynamics and impact on pulp prices are the key contradictions discussed in Mercer International's latest 2025Q1 earnings call.



Impact of Maintenance Downtime:
- Mercer International's EBITDA in Q1 was $47 million, down significantly from the previous quarter's $99 million.
- The decline was primarily attributed to 22 days of planned major maintenance downtime at their Celgar mill.

Pulp Market Dynamics:
- The NBSK average price in North America rose to $1,753 per tonne, an increase of $66 from Q4.
- The increase was due to stable demand and supply constraints.

Currency and Trade Uncertainty:
- Mercer reported a negative impact from the weakening U.S. dollar, affecting its costs and cash balances.
- This trend is expected to be a secondary effect of potential tariffs on trade.

Strategic Initiatives and Cost Reduction:
- The company launched a $100 million cost reduction and operational efficiency program by the end of 2026.
- This initiative aims to maximize operating rates and generate cash to reduce debt.