S&P Global Ratings Highlights Mixed Outlook for Pulp and Paper Sector in 2025

S&P Global Ratings issued a detailed report on the pulp and paper sector outlook for 2025, noting ongoing challenges and selective improvements across key players. Mercer International faced a downgrade due to expected EBITDA declines linked to weakening pulp prices and soft market demand. UPM-Kymmene Corp. received a stable outlook with expectations of moderate revenue growth driven by pulp sales ramp-up, offsetting declines in communication paper volumes. Despite forecasted margin improvements, UPM faces risks from volatile wood costs and structural shifts away from graphic paper. S&P emphasized that gradual market recovery and product mix optimization will support credit metrics, though significant rating upgrades are unlikely near term. The report stresses continued industry exposure to cyclical demand, regulation, and cost pressures, with sustainability practices and innovation remaining differentiators among leading companies.