Metsä Fibre has developed the new Global Pulp Price (GPP) price mechanism service, which offers customers more flexibility in choosing the best pulp pricing model for them. Both PIX and TTO pulp indices are used in the service. Based on what Metsä Fibre’s customer chooses, the prices for pulp batches could be based on the previous month’s PIX price index or could follow the index’s monthly de- velopment. On the other hand, the parties could agree that their transactions will follow market-based pricing, based on the TTO index for spot prices. “Based on their own appraisal of the situation and risk appetite, the customer can choose how much price weight- ing they want to put on PIX indices, which follow market prices more slowly, or faster-reacting TTO indices,” states Metsä Fibre’s VP, Sales Europe Mikael Lagerblom . Lagerblom is keen to emphasise that it is in the interest of all parties in the pulp market that prices are as stable as possible. A further objective of the GPP price mechanism service is that the relationship between supplier and buyer continues at fair market price across cycles. “The level of volatility has grown in the pulp market, making it harder to monitor price indices that are some- times slower to react. GPP allows faster reaction to changes if necessary.” The new system was adopted in autumn 2020 and is now used actively. “We are happy to see that the new service has been re- ceived well and adopted quickly. When it comes to trends in the pulp market and prices, the new service has taken our discussions with clients to a deeper level.” • New pricing model increases choice for customers
Mikael Lagerblom Vice President, Sales, Europe for Metsä Fibre. He previously worked in management-level sales roles at M-real and Metsä Serla.
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