S&P shifts Suzano view to negative

S&P said it revised the outlook for Suzano SA to negative from stable citing lower pulp prices.

A combination of a trade war between the U.S. and China, lower margins from paper producers, high inventories and weak demand in Europe have driven pulp prices down. S&P thinks prices have probably reached bottom, but the recovery next year will probably be slow with average prices about 5%-10% lower than last year.

“Given that, we expect Suzano’s credit metrics to weaken this year and significantly underperform for our expectations for the rating and for the company's financial policies, with net debt to EBITDA above 5x,” S&P said in a press release.

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