20 July 2009

Chile's CMPC Rallies on Speculation Pulp Outlook Is Improving

By James Attwood and Nathan Gill
     July 20 (Bloomberg) -- Empresas CMPC SA, Chile’s second-biggest pulp producer, rose the most in 10 weeks on speculation that recovering demand and prices will boost earnings.
     CMPC, controlled by Chile’s Matte family, climbed 6.7 percent to 15,591 pesos in Santiago trading. It was the biggest jump since May 8.
     The global market for pulp products is beginning to show signs of recovery as demand from China increases, Santiago-based newspaper Diario Financiero reported today, citing CMPC General Secretary Gonzalo Garcia. The BHKP index of pulp prices has risen 7.8 percent since a late April low, while the weekly NBSK price has rallied 10 percent since March.
     “Pulp prices are rising in international markets,” Cesar Perez-Novoa, an analyst with Celfin Capital, said in a telephone interview from Santiago. “That may be being priced into the stock.” The newspaper article is “driving the price of the stock as well,” he said.
     Empresas Copec SA, Chile’s largest wood pulp maker, climbed 2.5 percent to a five-week high of 7,001 pesos as U.S. equities and global commodity prices gained. The Standard & Poor’s 500 Index rose 1.1 percent, while the Reuters/Jefferies CRB Index of 19 raw materials increased 1.2 percent.