Suzano Warns of Rising Global Pulp Industry Costs as Geopolitical Tensions Reshape Market Dynamics

Suzano said global pulp markets continued to recover during the first quarter of 2026 as stronger paper demand and tightening supply conditions supported successive price increases, despite mounting geopolitical uncertainty and currency headwinds.

The company highlighted that escalating tensions in the Middle East, particularly involving Iran and the United States, are increasing logistics, energy, chemicals and production costs across the global pulp and paper industry. Suzano noted that the conflict has created additional pressure on supply chains and operating expenses throughout international markets.

Despite the volatile environment, Suzano reported solid operational performance and generated adjusted EBITDA of R$4.6 billion during the quarter. Results were impacted by the appreciation of the Brazilian real against the U.S. dollar, which pressured export revenues and margins.

The company said the global pulp market remained supported by resilient Chinese demand and supply-side constraints. In China, paper production increased 14.7% year-over-year, while delayed pulp projects and limited wood availability in Indonesia tightened market supply conditions and supported higher pulp prices.

Suzano also reinforced its position as one of the industry’s lowest-cost pulp producers, reporting a 7% year-over-year reduction in pulp cash production cost excluding downtimes to R$802 per tonne. Lower wood, chemical and energy costs helped offset inflationary pressures and operational challenges during the quarter.

To mitigate market volatility, Suzano’s hedge portfolio generated positive financial impacts during the quarter, including approximately R$48 million in positive commodity-related cash adjustments and R$3.0 billion in derivative income. The company said its hedging strategy helped cushion the impact of rising energy prices linked to geopolitical conflicts.

In its packaging operations, Suzano reported weaker demand conditions in North America. The Suzano Packaging U.S. business was affected by customer inventory destocking and severe winter storms, which reduced sales volumes during the quarter.

Suzano also announced progress in its sustainability agenda after MSCI upgraded the company’s ESG rating to BBB, recognizing advances in governance practices and sustainability management aligned with international standards.