Pulp Price Surge Creates Mixed Prospects for Indonesian Paper Emitters

Impact of Rising Global Pulp Prices

The surge in global pulp prices is creating a complex landscape for Indonesian paper emitters in 2026. While higher pulp prices typically signal increased production costs, integrated players with pulp production capabilities are positioned to benefit ¹

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Source 2

https://investasi.kontan.co.id/news/prospek-emiten-kertas-ditopang-ekspansi-kenaikan-harga-pulp-cek-rekomendasi-analis

. Analysts from various securities firms provide nuanced views on how different companies will navigate these market conditions.

Integrated Players: Potential Beneficiaries

Companies like PT Indah Kiat Pulp & Paper Tbk (INKP) and PT Tjiwi Kimia Tbk (TKIM) are expected to maintain their competitive edge due to their vertical integration ¹

. These companies can control their production costs and potentially benefit from the higher selling prices of their products. As noted by Abida Massi Armand from BRI Danareksa Sekuritas, "For large and integrated emitters like INKP, the surge in pulp prices becomes a positive catalyst to thicken margins" ²

Source 2

https://investasi.kontan.co.id/news/prospek-emiten-kertas-ditopang-ekspansi-kenaikan-harga-pulp-cek-rekomendasi-analis

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Non-Integrated Players: Margin Pressures Ahead

In contrast, non-integrated players lacking pulp production capabilities may face significant margin pressure due to the rising costs of raw materials. Hendra Wardana, Founder of Republik Investor, notes that "the increase in pulp prices directly impacts production costs as pulp is the main raw material for the paper industry" ³

. This pressure is expected to be particularly challenging for smaller or non-integrated players.

Market Outlook and Investment Recommendations

Despite the challenges, analysts remain cautiously optimistic about the prospects for major players in the industry. The key factors influencing their outlook include the companies' ability to maintain operational efficiency, manage pricing strategies, and navigate the fluctuating global pulp prices. As the industry moves through 2026, selective investment in large, efficient players with strong market positioning is recommended ³

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